Apple expected to maintain high iPhone ASP with 2018 releases

Posted:
in iPhone edited April 11
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.

Comments

  • Reply 1 of 12
    GeorgeBMacGeorgeBMac Posts: 2,114member
    I hope that doesn't happen...   If the high end is too high-end (2/3 OLED >$1K), it will push more people down into last year's models -- which is OK, but not optimal.  

    I think the problem is that (at least for me):  the OLED screen doesn't provide enough benefit for its cost premium over the LCD.
  • Reply 2 of 12
    78Bandit78Bandit Posts: 167member
    I'll pay $700 for a really good phone, heck I'll pay $800 if the storage capacity is high enough.  That's where my line is drawn though.

    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.
  • Reply 3 of 12
    I think the problem is that (at least for me):  the OLED screen doesn't provide enough benefit for its cost premium over the LCD.
    This is a good point. Many people talk about how great OLED screens are but I don’t notice any significant difference between my X and my previous 7. Except for blacks which are much nicer on the X.
    racerhomie3GeorgeBMac
  • Reply 4 of 12
    BRILLIANT.....

  • Reply 5 of 12
    entropysentropys Posts: 1,002member
    Apple could halve its margins and it would still have a high ASP compared with the rest of the phone market.

    Thing is, it doesn’t need to.
    racerhomie3
  • Reply 6 of 12
    78Bandit said:
    I'll pay $700 for a really good phone, heck I'll pay $800 if the storage capacity is high enough.  That's where my line is drawn though.

    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.
    I believe Apple will release iPhone X+ at the starting price of $999 and all those people who didn't buy the 2017 iPhone X due to size or price will suddenly find value in iPhone X+. The current iPhone X will drop to $899 and people who thought $999 was too much will now find it priced right. Now what should be the price for new LCD model (i.e., iPhone 9)? Hmmm...
  • Reply 7 of 12
    Milunovich, in February, predicted that Apple would report its best quarter ever; the company indeed posted its highest-revenue quarter.

    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. 

    apricot88GeorgeBMac
  • Reply 8 of 12
    georgie01 said:
    I think the problem is that (at least for me):  the OLED screen doesn't provide enough benefit for its cost premium over the LCD.
    This is a good point. Many people talk about how great OLED screens are but I don’t notice any significant difference between my X and my previous 7. Except for blacks which are much nicer on the X.


    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.

  • Reply 9 of 12
    Only time will tell.

  • Reply 10 of 12
    For $550 for a 64GB red iPhone in September is worth the wait for me!  Otherwise, if Apple comes out with a red 5.8" for $1099 with 256GB storage, I buy that in September.  I not wait till April 2019!  
  • Reply 11 of 12
    78Bandit said:
    I'll pay $700 for a really good phone, heck I'll pay $800 if the storage capacity is high enough.  That's where my line is drawn though.

    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.
    iPhone buyers buy the iPhone because it is a luxury item.  They expect high prices.  Even teenagers are carrying around the X models.  If one buyng the iPhone outright it is expensive.  But most of the purchases are made on the installment plans so it is an extra $40 a more a month.  
    edited April 12
  • Reply 12 of 12
    looks like i’m going to end up buying a two year prior phone just to be able to keep within my price range for a phone. iphone X by 2019.
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