Apple is an aspirational brand offering high quality, innovative products at a premium price. As a result, the company escapes the typical trend of declining prices that drive demand for other devices. In fact, demand for iPhone is directly correlated to the direction of ASPs – higher prices, higher demand and vice versa. We see three recent examples of this phenomenon. First, Apple’s strongest iPhone unit growth in the past five years coincided with the largest ASP uplift, +11% in FY15, with the introduction of the larger screen iPhone 6 Plus. Second, when Apple launched cheaper iPhones, 5c and SE in FY13 and FY16, demand disappointed and iPhone unit growth decelerated at a faster clip than any other year… Lastly, despite a $20 price increase to help digest increased costs associated with dual camera technology in the iPhone 7 Plus, the product was constrained through the end of CY16. In fact, iPhone ASPs rose 1-2% through F3Q17, boosted by rising iPhone 7 Plus mix, helping to re-accelerate unit demand from the FY16 lows. — Morgan Stanley analyst Katy Huberty
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MacDailyNews Take: Yup.
Apple sells premium products at premium prices to premium customers. – SteveJack, MacDailyNews, October 23, 2012
You do not what to be a user of cut-rate devices, unless you want the type of R&D that delivers products that are woefully behind in performance like, for example, Android phones.
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How Apple’s premium-priced iPhone X tests economic theory – September 18, 2017
Apple’s A11 Bionic chip in iPhone 8, 8 Plus, and iPhone X leaves Android phones choking in the dust – September 18, 2017
The inside story of Apple’s amazing A11 Bionic chip – September 18, 2017
Apple’s A11 Bionic obliterates top chips from Qualcomm, Samsung and Huawei – September 18, 2017
Apple accelerates mobile processor dominance with A11 Bionic; benchmarks faster than 13-inch MacBook Pro – September 15, 2017
Apple’s A11 Bionic chip in iPhone X and iPhone 8/Plus on par with 2017 MacBook Pro – September 14, 2017
If Apple is a Veblen brand then raise the price of the next iPhone by $100 – April 15, 2014
$17,000 Apple Watch Edition ‘risks the adoration of the masses’ or something – March 10, 2015
Apple’s iPhone 6: From Louis Vuitton to Chanel – September 2, 2014
Newsflash: Apple sells premium products at premium prices to premium customers – October 23, 2012