While Apple's average iPhone price surges to $687, Android devices flounder at $254

Posted:
in iPhone edited February 2015
Highlighting the huge disparity between the iPhone and the rest of the mobile market, the average selling price of Apple's smartphone lineup is now 2.7 times that of devices running Android.




Propelled by the $100 premium for the larger iPhone 6 Plus, as well as the upsell incentives of higher capacity 64- and 128-gigabyte models, the average selling price of the iPhone surged to $687 last quarter.

In contrast, new data from ABI Research and The Wall Street Journal shows that the average selling price of Android devices last quarter was just $254. In fact, over the last year, Android's average selling price has fallen by more than $100.

Android's freefall helps showcase how its leading manufacturer, Samsung, saw its profits plunge 64.2 percent last quarter. In particular, Samsung's premium-priced handsets in its Galaxy series were decimated by Apple's larger iPhone 6 and iPhone 6 Plus models, which debuted last fall.

Leading the way at the low end of the market has not been Samsung, but instead Chinese electronics maker Xiaomi, which had an estimated average selling price of $220 for its handsets last quarter.

Apple, meanwhile, has been steadily increasing the average selling price of the iPhone while the rest of the smartphone market struggles. The $687 average price achieved last quarter was up considerably from the sub-$600 ASP achieved in the third quarter of fiscal 2014, according to ABI Research.

Things were even worse for Microsoft, whose handset division had an average selling price of just $45 last quarter.

Apple's blockbuster holiday quarter, in which it sold a record smashing 74.5 million iPhones on its way to $18 billion in profit, flew in the face of some market watchers who have claimed for years that the company should compete with low-cost Android devices to gain market share. But Apple has long established itself as a luxury brand, eschewing market share in favor of high margins on premium products that customers desire.
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Comments

  • Reply 1 of 93
    Personally, I consider my Apple iPhone 6 with 128 GB storage to be well worth is $1K price. It's the best iPhone ever, the best camera, the best iOS, etc.

    I use it every day, and can't imagine life without it.
  • Reply 2 of 93
    rob53rob53 Posts: 1,974member

    "Things were even worse for Microsoft, whose handset division had an average selling price of just $45 last quarter."

     

    How can you even manufacture a legitimate cell phone for $45? Microsoft must have been giving away most of their phones. I'm sure they were giving away most of their Surface tablets.

     

    As for Android phones, as many have said, it's a race to the bottom to see who can sell the most and Samsung, Xiaomi and the others are fight to get that honor. I'd rather look towards the company that's actually putting some money into their products instead of trying to find a way to strip it as much as they can to sell as many as they can.

  • Reply 3 of 93
    neilmneilm Posts: 569member

    Since there are no low end iPhones, but there certainly are low end Android handsets, comparing average selling prices alone doesn't give a very meaningful picture. Yes an approximately comparable iPhone sells for more than its Android counterpart, and yes Apple makes a higher margin on what it sells, but no, Apple doesn't dilute its product mix with basic models.

  • Reply 4 of 93
    nchianchia Posts: 121member
    You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.
  • Reply 5 of 93
    rogifanrogifan Posts: 10,669member
    It will be interesting to see if Apple can sustain that $687 ASP. I still feel they should increase storage at the low end but if they do that ASP's will come down some. If higher and higher ASP's is Apple's goal then I don't see any change to storage options in the near future. Except maybe at the high end if Schiller feels he can upsell people to an even more expensive model.
  • Reply 6 of 93
    Does someone have links do articles of analyst commenting apple quarter results? Specifically analysts who said apple was doomed? I would like to laugh a little...
  • Reply 7 of 93
    Is this a "no shit sherlock" article. Apple doesn't compete in the budget arena whilst most of the Android vendors do. What's the next article going to be Ferrari are selling more than Volvos?
    The only viable comparison is the comparison between the high end Android handsets and Apple's. In which Apple are crushing all before them.
  • Reply 8 of 93
    jungmarkjungmark Posts: 6,626member
    But but but market share...commodity...doomed!
  • Reply 9 of 93
    jbdragonjbdragon Posts: 1,964member
    Quote:

    Originally Posted by DanielSW View Post



    Personally, I consider my Apple iPhone 6 with 128 GB storage to be well worth is $1K price. It's the best iPhone ever, the best camera, the best iOS, etc.



    I use it every day, and can't imagine life without it.

     

    Aren't you talking about the 6+ at that price?  I got the 6 with 128 Gig's and I believe it was around $800 or so.  It is a great phone though. Only time will tell if I end up keeping this one as long as the last one, my iPhone 4 that I had for over 4 years and in the end sold it to T-mobile a month after having my iPhone 6 from them for $202.   Can you even get anything for a Android phone that's over 4 years old?

  • Reply 10 of 93
    MacProMacPro Posts: 17,868member
    rob53 wrote: »
    "Things were even worse for Microsoft, whose handset division had an average selling price of just $45 last quarter."

    How can you even manufacture a legitimate cell phone for $45? Microsoft must have been giving away most of their phones. I'm sure they were giving away most of their Surface tablets.

    As for Android phones, as many have said, it's a race to the bottom to see who can sell the most and Samsung, Xiaomi and the others are fight to get that honor. I'd rather look towards the company that's actually putting some money into their products instead of trying to find a way to strip it as much as they can to sell as many as they can.

    Yep and I bet all those shots of a Surface Tablet being used by players at the Superbowl were product placement deals and the players probably didn't even have them on, I didn't see one touch of a screen just the blue case held up for the camera shot. Microsoft should start giving their mobile phone away free. This along with giving Windows and Office away for free is probably the only way Microsoft will actually get product out there and it seems they still have a few billion in the bank to burn through. That way they can claim an increased market share just before they vanish for good.
  • Reply 11 of 93
    Quote:

    Originally Posted by broadbean View Post



    You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.



    Seems to me that "expensive" and "variety" weren't much on the minds of the 74 million who bought iPhone 6s in three months.

     

    "Good enough" and "much less" are compromises those with little appreciation for quality live with.

     

    The lesson which seems to be lost on far too many here is that "desirability" does NOT equate to "lower price."

  • Reply 12 of 93
    MacProMacPro Posts: 17,868member
    broadbean wrote: »
    You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.

    It's not a notion ... what you said is all true if you just add the words 'just barely' in front of 'good' in that sentence. ;)
  • Reply 13 of 93
    jbdragonjbdragon Posts: 1,964member
    Quote:

    Originally Posted by broadbean View Post



    You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.

     

    Maybe Apple is more expensive, but I don't want Good enough.  I'm also not a fan of Android.   Maybe that's why it seems Android users are replacing their phones at least every year.  You ask them and they start throwing out a long this of Android phones they've owned.  If you're always replacing your phone, that's costing you money!!!  I had my iPhone 4 for over 4 years before replacing it with the iPhone 6.  I think I got my money worth.  Not only that, but was on Straight Talk for a couple years with it, so I had a cheap $45 a month unlimited plan which was better then the AT&T plan it replaced and of course almost half the price every month.    If you're replacing your Android phone every year because you got that just good enough one, and now you need another good enough one.  Every year dumping $250+ on a Android phone, that's $500+ every 2 years.  That's even more cheap Android phones sold and sold to the same people unless they wised up and jumped ship to Apple.

     

    I don't know what Microsoft's plan is.  $45 a phone is laughable.  Talking about going in with CHEAP phones.   There is ZERO money to be made.  Maybe that's why sales have climbed slightly.  They're giving them away.  In the end, you'll never make money doing that.  No one is going to pay real money for them when you try to increase prices later.

  • Reply 14 of 93
    In comparison to the automobile market:
    When it comes to luxury cars: whether it is a small BMW or large BMW, they all end up at or over $50,000 with the largest model costing the most.

    This is why Apple prices its 16 GB iPhones similarly.
  • Reply 15 of 93
    radarthekatradarthekat Posts: 2,926moderator
    Quote:
    Originally Posted by broadbean View Post



    You could argue this supports the notion Apple is more expensive and you could buy a "good enough" Android phone for much less, with a greater variety.



    Which is exactly what those who simply don't have the money for an iPhone do and also some of those who could spring for an iPhone but don;t consider the greater lifetime experience and eventual resale value.  In a country like the Philippines, Android rules as you can get an Android model for anywhere form $30 on up.  People there prepay for 'load' (text message volume, data, and voice minutes) and most people almost exclusively text as it costs 1/10th the cost of voice minutes.  Most folks I know there, which is a large number, pay between $5 (250 Philippine Pesos) up to about $20 per month for all their mobile phone needs.  And they don't pay for apps.  This is typical of the emerging markets, and who can blame Apple for not wanting to try for market share in such locales.

     

    Here's one ex-pat's insights on the subject:

  • Reply 16 of 93
    apple ][apple ][ Posts: 8,360member

    And how many people are lining up to buy Apple's phones? Oh, 74 million phones sold last just last quarter?<img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

     

    People know quality when they see it, and people who can afford to don't mind paying a little bit extra for a product that's a lot better.

     

    I do kind of feel sorry for any Android users out there, because I believe that with the exception of a small group of fanatical lunatics, the average Android user would rather be using something else (hint: iPhone), if they had the means and the opportunity.

  • Reply 17 of 93
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by rob53 View Post

     

    "Things were even worse for Microsoft, whose handset division had an average selling price of just $45 last quarter."

     

    How can you even manufacture a legitimate cell phone for $45? Microsoft must have been giving away most of their phones. I'm sure they were giving away most of their Surface tablets.

     

    As for Android phones, as many have said, it's a race to the bottom to see who can sell the most and Samsung, Xiaomi and the others are fight to get that honor. I'd rather look towards the company that's actually putting some money into their products instead of trying to find a way to strip it as much as they can to sell as many as they can.




    I would bet that $45 figure includes a lot of phones that don't run Windows Phone 8.1 and which still have the Nokia name on them.

  • Reply 18 of 93
    Quote:

    Originally Posted by digitalclips View Post





    Yep and I bet all those shots of a Surface Tablet being used by players at the Superbowl were product placement deals and the players probably didn't even have them on, I didn't see one touch of a screen just the blue case held up for the camera shot. Microsoft should start giving their mobile phone away free. This along with giving Windows and Office away for free is probably the only way Microsoft will actually get product out there and it seems they still have a few billion in the bank to burn through. That way they can claim an increased market share just before they vanish for good.



    I saw an article describing how the surface pros were locked down to one app that allowed them to see still picture replays. They are not allowed to stream video yet. This experience is supposed to be superior to the grainy black and white photos they were using, but at one point I saw them reviewing black and white photos as well.  Microsoft and the NFL have a dumped a lot of money into this venture (including custom cases and climate controlled carts) to use one app. 

  • Reply 19 of 93
    rob53rob53 Posts: 1,974member
    Quote:

    Originally Posted by digitalclips View Post





    Yep and I bet all those shots of a Surface Tablet being used by players at the Superbowl were product placement deals and the players probably didn't even have them on, I didn't see one touch of a screen just the blue case held up for the camera shot. Microsoft should start giving their mobile phone away free. This along with giving Windows and Office away for free is probably the only way Microsoft will actually get product out there and it seems they still have a few billion in the bank to burn through. That way they can claim an increased market share just before they vanish for good.

    I read someplace that Microsoft had to pay the NFL to get Surfaces onto the field. As with the Bose contract, nothing else can be used so the coaches and players are using them because that's all that's available on the field. The funny thing is that the waterproof jackets are not available for retail sale and that you always see them plugged in most of the time. They probably can't even last one game without having to be re-charged. Typical Windows laptop. Microsoft even stooped low to get Russell Wilson to hawk (sorry) the Surface on national TV ads when I thought he was previously an Apple-product user. Whatever the NFL demands, the players who want to keep their contracts will do. After all, professional sports has nothing to do with sports and everything to do with advertising and making those old white guys (owners) a lot of money.

  • Reply 20 of 93
    rob53rob53 Posts: 1,974member
    Quote:
    Originally Posted by tookieman2013 View Post

     



    I saw an article describing how the surface pros were locked down to one app that allowed them to see still picture replays. They are not allowed to stream video yet. This experience is supposed to be superior to the grainy black and white photos they were using, but at one point I saw them reviewing black and white photos as well.  Microsoft and the NFL have a dumped a lot of money into this venture (including custom cases and climate controlled carts) to use one app. 




    "Prior to the season, Microsoft and the NFL struck a five-year $400 million deal with one of the major components being that the Microsoft Surface would become "the official tablet of the NFL" with coaches and players using the Surface on the sidelines during games."

     

    http://www.businessinsider.com/microsoft-nfl-surface-ipads-2014-9?op=1 Doesn't really say anything about the NFL having to dump any money into it. I know I'm not supposed to comment on other site's articles but this is one that really nails Microsoft.

     

    funny this is will the Surface be around in 5 years?

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