The new iPhone lineup

Three model numbers. Five screen sizes. Seventeen configurations and price points.

An even $1,000 range, from $449 (iPhone 7, 32GB) to $1,449 (iPhone Xs Max, 512GB.

  • iPhone 7: $449/32GB, $549/128GB
  • iPhone 7 Plus: $569/32GB, $669/128GB
  • iPhone 8: $599/64GB, $749/256GB
  • iPhone 8 Plus: $699/64GB, $849/256GB
  • iPhone XR: $749/64GB, $799/128GB, $899/256GB
  • iPhone XS: $999/64GB, $1,149/256GB, $1,349/512GB
  • iPhone XS Max: $1,099/64GB, $1,249/256GB, $1,449/512GB

My question: Do these price points push ASPs (average selling prices) up or down? I’ve seen estimates on both sides now.

UPDATE: Gene Muster has posted his estimates for each configuration’s share of the iPhone sales dollars. Click to enlarge.

 

15 Comments

  1. Gregg Thurman said:

    “9” went the way of the 4.7″ screen.

    I think it’s obvious that with the change in the iPhone naming convention management sees a new, clearly differentiated future for it.

    I have tried, with several different unit sales models, to come up with lower iPhone ASPs. I just can’t get there. Best I can do (lower ASPs) is $850, and that’s heavily weighted with iPhone XR, iPhone 8 and iPhone 7 (combined 70%) vs iPhone XS Max and iPhone XS (combined 30%).

    Using December quarter 2017 results as a guide, actual iPhone ASP was 13% higher than the “one of” ASP. A similar relationship would result in a realized ASP of $985.

    I have not factored in distribution discounts, however, I believe those will have less than a $45 impact on realized ASP.

    1
    September 12, 2018
    • Fred Stein said:

      Without doing the homework, I’d agree. ASP is not going down. Some buyers will max out the Max pulling the average up. There’s no SE to pull the average down.

      The wild card is how many and when games appear for gamers, who will model-up and option-up, and spend more in the App Store. Any gamers out there to provide insight?

      With SSD prices dropping margins should be nice.

      1
      September 12, 2018
      • David Emery said:

        It has bothered me for a long time how Apple placed a premium price on phone storage.

        1
        September 12, 2018
        • Fred Stein said:

          It’s minibar pricing. Bottled water for $2.99 in your hotel room. But amortize the premium over two years and the premium drops to pennies per day.

          0
          September 13, 2018
  2. George Row said:

    The SE, 6, 6-plus, 6s and 6s-plus are no longer available for sale on the Apple Store. They are all marked “available from authorised resellers”.

    So the people who would have bought those will move up the price range to the 7 and 8 models.
    The people who bought an 8 last year because their budgets didn’t stretch to the X , can afford the Xr. The people who always want the biggest and best will buy the Xs or Xs Max depending on their size preference.
    Every slot is spending $50-$100 more than last year.

    So ASP goes up.

    2
    September 12, 2018
  3. Ken Cheng said:

    The iPhone 7 is still a very good phone. I have it and wasn’t really thinking about upgrading, but the XR’s price point is appealing to me. Of course now that I’m thinking of upgrading, it makes sense to do a comparison between the XR and the XS. D*mn you Apple! How easily they get me to go from ho-humming along, to thinking I should upgrade and spend up to $1250 for an XR with AppleCare. Yep, ASPs are going up.

    2
    September 12, 2018
  4. Gregg Thurman said:

    Munster is assigning the 8 and 7 models 41% of total unit sales. That more aggressively favors the bottom end than my worst case scenario. Historically the bottom end of the iPhone lineup only accounts for about 30% – 35% of total units.

    The biggest difference between our ASP estimates is that mine was for the December quarter alone, while I think Munster’s estimate is a full year. If that is correct then Munster is forecasting ~5% ASP growth YoY. I’ll take it and smile all the way to the bank.

    With everything I’ve read so far, I can see strong unit and market share growth during through FY2020, driven by the iPhone Xr.

    0
    September 12, 2018
  5. Gregg Thurman said:

    Considering the tech in the XR, XS, and XS Max I’m pretty confident that Apple generates more gross margin % with the XR than it does on the other two.

    I say that because it appears that, by design, iPhone pricing and reviewer comments on feature differentiation seem to be guiding the consumer to the XR (up from the iPhone 8 and down from the iPhone XS).

    If I were Huawei or Samsung I’d be concerned about C2019.

    Question: Was Apple’s decision to discontinue the 6, 6S and SE driven by a need to free up production capacity for the XR, XS, and XS Max?

    0
    September 12, 2018
  6. John Kirk said:

    I know nothing, and this is purely my gut speaking, but I think people are underestimating the sales of the largest phone, the IPhone X S Max. They’re small tablets. In your pocket. I think the sales of these phones are going to be much greater than anticipated.

    2
    September 12, 2018
    • Gregg Thurman said:

      They’re small tablets. In your pocket. I think the sales of these phones are going to be much greater than anticipated.

      At the expense of iPad sales?

      0
      September 12, 2018
      • John Kirk said:

        “At the expense of iPad sales?”

        Absolutely, I think Apple ended the sales of the iPad mini because they knew they were going to fill that slot with the iPhone X S Max.

        So Apple loses a few lower priced tablet sales and they gain a ton of high-priced, high-margin, repeating iPhone sales. I’d say that’s a trade well worth making.

        0
        September 13, 2018
    • Ken Cheng said:

      Oh, yeah, the iPad mini vacuum has to be filled!

      1
      September 13, 2018
    • Fred Stein said:

      I’m equally ignorant and equally confident in the success of the Max. China will love it. Kids will love it.

      What amazes me is that almost no one mentioned the sound quality and the performance for video and games. It’s called “user experience”.

      0
      September 13, 2018

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