Apple expected to maintain high iPhone ASP with 2018 releases
The next iPhone line will probably consist of three models, including two OLED variants and an entry level version with an LCD screen, leading to "flattish" average selling price for the fiscal year 2019, according to a new analyst report.
The report by Steven Milunovich of UBS, obtained by AppleInsider, lays out two scenarios for pricing of the next generation of iPhones. The first would have a 6.4-inch OLED model priced at $1,099, a $999 5.8-inch OLED and a $750 6.1-inch model with LCD. An alternative lineup would consist of a $1,050 6.4-inch OLED model, a $900 5.8-inch OLED, and a $700 6.1-inch LCD iPhone.
Importantly, the report predicts 70 percent of users will pay $700 or more for their iPhone this year, despite that number being under 40 percent in prior years.
The device and size predictions are in line with those from other analysts, most recently Amit Daryanani of RBC, who expects three new models, including one 6.1-inch LCD iPhone.
The upcoming lineup, Milunovich writes, "offers another chance to move users up in price with a larger OLED model and a lower entry point for Face ID."
Milunovich wrote that Apple has laid out a three-pronged pricing strategy: "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."
Indeed, the report also shows a competitive pricing scheme for such older models as the iPhone 8, 8 Plus, 7, 7 Plus and SE.
Apple's first fiscal quarter of 2018 was its best on record thanks to sky-high iPhone ASP. The period, the first full quarter to account for the $999 iPhone X, saw the handset's ASP hit an astounding $796.42, up more than $100 year-over-year.
The report maintains a 12-month Buy rating for Apple, as well as a price target of $190. Milunovich, in February, predicted that Apple would report its best quarter ever; the company indeed posted its highest-revenue quarter.
The report by Steven Milunovich of UBS, obtained by AppleInsider, lays out two scenarios for pricing of the next generation of iPhones. The first would have a 6.4-inch OLED model priced at $1,099, a $999 5.8-inch OLED and a $750 6.1-inch model with LCD. An alternative lineup would consist of a $1,050 6.4-inch OLED model, a $900 5.8-inch OLED, and a $700 6.1-inch LCD iPhone.
Importantly, the report predicts 70 percent of users will pay $700 or more for their iPhone this year, despite that number being under 40 percent in prior years.
The device and size predictions are in line with those from other analysts, most recently Amit Daryanani of RBC, who expects three new models, including one 6.1-inch LCD iPhone.
The upcoming lineup, Milunovich writes, "offers another chance to move users up in price with a larger OLED model and a lower entry point for Face ID."
Milunovich wrote that Apple has laid out a three-pronged pricing strategy: "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."
Indeed, the report also shows a competitive pricing scheme for such older models as the iPhone 8, 8 Plus, 7, 7 Plus and SE.
Apple's first fiscal quarter of 2018 was its best on record thanks to sky-high iPhone ASP. The period, the first full quarter to account for the $999 iPhone X, saw the handset's ASP hit an astounding $796.42, up more than $100 year-over-year.
The report maintains a 12-month Buy rating for Apple, as well as a price target of $190. Milunovich, in February, predicted that Apple would report its best quarter ever; the company indeed posted its highest-revenue quarter.
Comments
If they'll offer the 6.1" LCD device in the $699 - $749 range I do think a majority of purchasers in FY 2019 will be buying either that or the X. What is missing though is a cheaper device that fits the form factor of the iPhone 8 or iPhone X. 6.1" with an LCD screen is going to be pretty big when you consider there will have to be at least some bezel to support the lighting module. Those that don't want a phablet will be looking at either the $1K iPhone X2 or a $600 iPhone 8 with its outdated design and huge bezels.
Thing is, it doesn’t need to.
Apple had been guiding record revenue of 84-87 billion since November of 2017. I see no reason to credit Milunovich for agreeing with Apple, especially if he waited until February for that non-call. I can’t remember the last time Apple blew their guidance.
Anyway, my prediction is $749/$899/$999 for the iPhone 9 Plus/X.2/X.2 Plus.
Sometimes, apps don't seem that different on my X than they were on my 7 Plus. However, when the X just wakes up, it's amazing how gorgeous the screen is.
Apps that have embraced the X layout look great and it looks like there is an infinite scroll.
O.T., I hope Star Wars Pinball gets off it's butt and updates its UI to support the X layout. They are going to release a couple of new tables soon, but I'd rather they support the X first.