Image source: Apple.

Better late than never. Or in Apple's (NASDAQ:AAPL) case, better late and better.

That's always been the iPhone maker's philosophy when it comes to product introductions. Apple cares very little about being first to market, so long as when it finally makes its way there that it has the best product. That was the case with large smartphones. Android OEMs capitalized on Apple's tardiness for a few years, and Apple drew some criticism, but 2014's iPhone 6 and 6 Plus were massively successful as the company finally moved to 4.7-inch and 5.5-inch displays, respectively.

And there's more where that came from.

Not everybody's doing it
Third-party web analytics researcher Mixpanel tracks the composition of iPhone models out in the wild. The most recent data suggests that 32% of the installed base are still using a 4-inch model like the iPhone 5, 5, or 5s. As some of these users upgrade to larger displays, since that's the general trend that consumer preferences are taking, then Apple still has some untapped opportunities with its bigger models.

Don't just take Mixpanel's word for it, either. On the past few conference calls, CEO Tim Cook has given very specific data points as to what portion of the installed base has not yet upgraded. The official figures are show even more upside compared to Mixpanel's.

Apple measures the number of users that had an iPhone prior to September 2014 (when the larger iPhone 6 and 6 Plus launched), and this is how many that have not upgraded and the related inverse.

Conference Call Dates

July 2015

October 2015

January 2016

Percentage of install base that has not upgraded to larger displays




Percentage of install base that has upgraded to larger displays




Data source: Earnings conference calls.

The iPhone install base continues to shift gradually toward the larger displays, which not only boosts Apple's unit sales but also average selling prices since the larger models cost more and utilize that wonderful new storage pricing structure.

2 opportunities for the price of 1
So investors know that 60% of iPhone users have made the jump to larger displays. But it's not as if everyone wants a larger iPhone. There is still considerable demand for 4-inch iPhones. On the last call, Cook added, "And we continue to offer the iPhone 5s in the market and it continues to do quite well. And so we offer all of those, and I don't see us deviating from that approach."

This is also why it makes sense for Apple to release an updated 4-inch iPhone, since it will stimulate demand within the segment for smaller iPhones, although I tend to disagree with the rumored name for the device.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.