Apple is expected to break its average iPhone price record twice in the coming months as customers choose to buy more expensive “Pro” models that boost the tech giant’s margins.
Demand for the new iPhone 14 unveiled earlier this month is already robust enough to predict the global “average retail price” — or ASP — to rise to a record $892 in the September quarter and $944 in the September quarter. quarter of December, according to Counterpoint Research, a data provider, which bases its forecasts on consumer demand, market intelligence and talks with suppliers.
The current record is $873, set in the fourth quarter of last year.
The average selling price of iPhones is a key Apple measure for Wall Street, as smartphone sales still account for about 50 percent of the group’s revenue. The upward trajectory of these prices — from just $690 at the end of 2015 — is all the more significant as Apple chose not to raise the prices of its devices earlier this month at the flagship’s annual product release, a decision that has left some analysts the biggest surprise. of the event.
The trend is the popularity of iPhone 14 Pro and Pro Max models, which feature a faster chip, a 48-megapixel camera and a new information hub called “Dynamic Island”.Read:Video Review: Four Days With the iPhone 14 Pro Max
When research group Evercore ISI surveyed some 4,000 consumers this month, it found that 56 percent of those likely to buy an iPhone were planning to buy a Pro model, up from 41 percent last year. It expected ASPs to be about $940 in the next year, about 10 percent higher than in the iPhone 13 cycle.
“We are raising our iPhone revenue estimates for the next four quarters thanks to stronger-than-expected ASPs,” Evercore analyst Amit Daryanani told customers.
The numbers suggest Apple is in a much better position today than it was in January 2019, when it was forced to issue its first revenue warning in 16 years due to weak iPhone sales in China.
It has since taken a bigger market share in China thanks to the launch of 5G-enabled iPhones in 2020 and the demise of Huawei, which was hindered from selling 5G phones after US sanctions.
According to Counterpoint, Apple’s market share in China increased from 15.9 percent to 23 percent between the end of 2020 and the end of 2021.
“Other Android manufacturers – Vivo, Oppo and Honor – have all entered the premium segment, but premium brand status cannot be built overnight,” said Counterpoint analyst Archie Zhang.Read:Samsung to be the next smartphone maker to offer satellite connectivity
Globally, the premium market of phones costing more than $400 outperformed total sales for nine consecutive quarters, with Apple holding 57 percent market share in the past quarter, data from Counterpoint shows.Read:Amazon is holding its annual hardware event on September 28th
The ultra-premium segment — phones priced above $1,000 — nearly doubled in the quarter from a year ago, with Apple taking 78 percent of the market.
The upward trajectory in iPhone ASP reflects the success of a strategy Apple began in 2018 when it stopped reporting how many iPhones it sold each quarter. That move had fueled “peak iPhone fears,” as Apple claimed it was shifting its focus from volume to revenue and margins.
Today, analysts believe that Apple is in a new transition from ASPs to “lifetime user value” – a strategy to increase the revenues of its more than 1 billion iPhone users with a growing array of services.
In late 2020, the company launched Apple One, which includes a bundle of Apple services, including Music and iCloud, at one discounted price. The next logical step is for an iPhone itself to become part of the bundle, allowing users to pay a perpetual monthly fee in exchange for services and a new smartphone every two years at no cost.