Apple demonstrated impressive business shrewdness with the iPhone X. The lineup's popularity was falling, as users weren't feeling convinced for an upgrade. As more than half of the company's revenue is dependant on the iPhone, Cupertino needed to take action and take it fast.
Therefore, it proceeded to launch the iPhone X, dividing its September smartphone portfolio neatly into two halves. The $1000 iPhone X did well at improving ASP, ensuring that Apple made more by selling less. Now, this trend will continue in 2018, if UBS' Steven Milunovich is correct. Take a look below for more details.
70% Of Users Will Pay $700 Or More For The iPhone This Year As Apple's ASP Hike Solidifies; 6.1" LCD iPhone Will Cost Either $700 Or $750 Claims UBS Securities
We've got a detailed analysis from UBS, which lays down a lot of details for Apple's future iPhone pricing. If you expected Cupertino to go easy on users this time, you're wrong. The starting price for this year's gadgets will be $700 at a bare minimum, or as Apple would put it, $699. The company's all about money now folks, as investors' financial concerns look to milk the iPhone cow while it's able to stand on its own.
Which, might not be for long. Maturing hardware and tough competition have ensured that Apple's dominance isn't what it used to be. Therefore, it is now forced to turn its focus on cheap Average Sales Price tricks to satiate investor hunger and keep the title of the 'world's most valuable company'.
According to Milunovich, there are two possible pricing models to expect for this year's smartphone lineup. Apple is rumored to launch three devices, two with OLED displays and a third with a 6.1" LCD panel. Current supply chain sentiment suggests that it will hedge most of its 2018 iPhone bets on the LCD device. This will be priced at either $700 or $750 according to today's report. Apple's ASP for the iPhone hit an all-time high this quarter, at $796.
Now, the company will look towards stabilizing this gain. Suggested price points for the two iPhone X successors reveal $900 or $999 for the iPhone XS and $,1049 or $1,099 for the iPhone XS Plus. Looks like decreased market interest in the iPhone X hasn't taught Apple anything this year. Either it's this lack of understanding or UBS has got a lot of details wrong today.
Looking at Apple and Samsung's vested interests for OLEDs to perform well, we're inclined to believe the former. Milunovich also highlights his take on Apple's current smartphone strategy. According to the analyst, Apple will, "Cascade top-of-the-line features down the price curve (screen size, camera, etc), Move premium customers up the price curve with moderately higher prices, and establish higher price bands based on new features while tapping into lower-end markets with older devices."
It's all business folks. While Steve Jobs' was famous for his relentless profit focused device, he had the charm to back it up. For Tim Cook, it's all about appeasing investors and keeping the ship stable. Unless Apple launches its custom processors for the Mac. Then, we'll have more to talk about. Thoughts? Let us know what you think in the comments section below and stay tuned. We'll keep you updated on the latest.
News Source: Apple Insider