“Apple better hope it moves its next round of iPhones in even higher quantities than what has become the norm,” Brian Sozzi writes for TheStreet. “Because with average selling prices likely lower than this generation of iPhones, robust volumes will be needed to please bullish Wall Street analysts and investors. Points out UBS analyst Steven Milunovich.”
“Even under optimistic scenarios, the new range of iPhones is unlikely to carry the sticker shock the iPhone X did,” Sozzi writes. “Hence, volumes must be strong.”
One scenario is a 6.4-inch OLED model priced at $1,099, 5.8-inch OLED at $999, and a 6.1-inch LCD at $750. This would drive a flat-to-up ASP if over 70% of buyers opt for the flagship models and OLED screens take 35% of the mix. If Apple gets more aggressive on price, we could see a $1,050 6.4-inch OLED model, a $900 5.8-inch OLED, and a $700 6.1-inch LCD. Apple would need at least 80% of buyers to opt for the flagship models with the OLED models accounting for 40% of the mix to achieve a flat-to-up ASP. The fall line-up offers another chance to move users up in price with a larger OLED model and a lower entry point for Face ID. — UBS analyst Steven Milunovich
Read more in the full article here.
MacDailyNews Take: Ming-Chi Kuo has the big boy pegged at 6.5-inches, not 6.4 (6.46-inches to be exact). Regardless, come to papa, big boy!
SEE ALSO:
Ming-Chi Kuo: Apple’s next-gen 6.1-inch LCD iPhone to outsell next-gen 5.8- and 6.5-inch OLED iPhone X models – February 5, 2018
Apple’s next-gen 6.5-inch ‘iPhone X Plus’ could be a huge seller – January 6, 2018
iPhone X drives Apple’s ‘best ever’ year for smartphone sales – December 1, 2017
Ming-Chi Kuo: Apple working on 6.5-inch ‘iPhone X Plus’ for late 2018 launch – November 13, 2017
Apple may use Full Active LCD over OLED to create next-gen bezel-less iPhones – September 28, 2017
Apple prices are only lowered as an absolute last resort to clear out obsolete inventory. Even then Apple doesn’t drop the prices in its own store. Apple will probably do what they always do, hold the price for several years and let Apple resellers discount the slow sellers.
The many BOGO sales on all models of iPhones this year tells us that the competition isn’t letting up. It would be wise for Apple to keep the whole family up to date and competitively priced. But this is not the Jobs Apple anymore.
One would think Apple tested the extreme upper limits on pricing with the X, and we hear every other day how MDN says that is setting sales records (not!). Been a long time since market share numbers were trotted out. Remember, you can win profit share and end up with a dying platform, just look at the Mac app store. The iOS app store is 90% garbage games, but whatever, all Apple cares about is collecting iOS app revenue.
ASP may jump if they join the Samsung phat phone trend and kill off the SE. Certainly there are a few hundred people willing to pay $2k for an XL phone and Apple doesn’t give a shit about low margin customers any more than they do longtime Mac owners.
Remember, the Cooked Apple thought that a $10k gold Apple Watch was a good idea. The current crew running Apple thinks they can keep banking huge profit margins thanks to name reputation alone — so you will get what you get, whenever Apple decides you can have it, and you will like it.
Im interested in this dying platform theory. They have went from an active installed base of 800 million to 1.1b over the last 2 years. There app revenue on a smaller market share is more than double that of androol so i am having trouble following here.
As for low margin consumers that is not who apple is or want to me for the majority of their products. If you want that go buy a Huawei or Oppo phone for 1/4 the price and like facebook you will be the product as well. I for one do not want my devices coming loaded with spyware and adware on them.
So apple has now released something 3 generations of apple watch depending on what you want to call it. The have effectively eliminated all competition in the category while maintaining 35+% margins. Because they made a special watch to launch which they got every celebrity on the planet to wear i would not call that misguided. How much free press not to mention money did they make off that and it thrust the product into the mainstream. the product is the runaway success no one wanted it to be in spite of the naysayers.
they are a money machine who has not missed on a product in the last 10 years. their sales in any given category would equal a large very profitable business which wall street and investors would jump all over as long as it wasn’t apple.
So give me a break with the doom and gloom
The SE is going nowhere. My wife refused to use an iPhone until they delivered one that was comfortable in her hand. She isn’t the only person who could care less about a really large phone – that is what iPads are for. And the wife has had an iPad2 since they came out.
Basically my wife is a good example of the SE market and they are important to Apple. It’s important to the carriers also. We moved our old landline to an SE for the grand price of $125 and $15 a month – saving $40 a month.
Yep. My wife’s 5 got a little long in the tooth. We went shopping, she hefted an 8 once, palmed the SE and that’s what we left with.
“Apple better hope it moves its next round of iPhones in even higher quantities than what has become the norm”
Seriously? Because selling 40 million phones a quarter and grabbing something like 80% of worldwide phone profits isn’t enough? You just can’t please some people…
“…robust volumes will be needed to please bull[shit] Wall Street analysts and investors.”
Lowering prices likely makes very little difference to sales figures. If someone is not buying an iPhone reducing it by $25 or something is unlikely to make them do so. If Apple reduce it by a larger amount $100 unless they have literally cut that off the cost of production then they’re reducing their profit per device and have to sell that many more to make it up. If we say that the make about $200 on average per phone, cutting it by $100 dollars means they have to sell double to make the same amount of money. Is $100 going to double sales? Could they make double the amount? No. Apple makes 80% or something of the profits in the mobile phone market, obviously that’s offset by other companies losing money, but there’s only so much money to make. These analysts seem to think that people are going to start buying two or something. I don’t pretend to understand Apple’s pricing structure but I do know that’s it’s carefully thought out. Just because they cut off x from production costs doesn’t mean it’s worth them literally passing that same amount on to the selling price in order to flutter the sales figures upwards a little.