Great informative article DED. Thank you for this information that rebuts the premise that people are unwilling to pay $1000+ for a premium phone.
It fascinates me that people don’t understand this idea.
I'm starting to believe that the naysayers on Apple-centric blogs are Android users masquerading as iPhone users, especially the most vocal of them (likeApplecynic). Some do it for the perverse joy they get in roiling a crowd, others that do it I'm convinced are paid agitators.
What nonsense. ASP went up because the iPhone X costs more. Apple still sold LESS iPhone Xs than they did previous flagships, but the price being higher brings up the ASP. No need for sensationalism.
Either a paid naysayer or a paid hack. Take your pick.
This entire article would have been great on Seeking Alpha lots of fan boys over there masquerading as astute investors, they would have loved this, or maybe a new section on AI "AAPL Insider" could generate a lot of traffic from our "AAPL long" members.
[These analysts just hate Apple. They will spin and spin to try to hurt Apple.] Sure there's someone out there who hates a company for a living, very rational, wow, just wow.
When the SE2 is released Apple’s ave. iPhone price will decline.
Analysts: Apple’s going out of business 🤒 Apple: Reports record earnings 🤗
If there is a decline in ASP after the release of the iPhoneSE2 it won't be much. iPhone SE only accounts for about 5% of total unit sales. Not enough to offset iPhone 8/Plus/X unit sales of 65% of unit sales, and 30% iPhone 6S/6S Plus/7/7 Plus sales (especially if the consumer is migrating to the larger, more expensive models as ASP clearly indicates).
- Nowhere in the article iPhone or Apple is mentioned.
- Only for Europe and to lesser extend China the increase of the ASP is linked to a shift to premium priced models (which could be Apple, but also models of other vendors)
- In Africa the increase of the ASP is linked to the evolution of feature phones to smartphones. I doubt we can assume that there are a lot of iPhones involved here
- In some countries the units sold go down while in to others the unit sold goes up. For South America: Brazil -4%, Chile -18%, Columbia +41%, Argentina +6%. This means that the ASP for South America could change while the models mix in a country remains relatively constant
For me the conclusion of DED is speculation, like the media who claim there is a weaker iPhone demand because some of the iPhone component suppliers publish weaker figures.
We'll have to wait for the Q1 and Q2 results to see whether the iPhone X is a commercial game changer or not.
DED's conclusion doesn't need to be defended, as it is solidly based on the reasonable application of historical facts to a new data point, but I'll bite.
Apple and iPhone have no need to be mention because they are the market leader and it is universally understood they would be a significant component to the discussion at hand. Would it be necessary to mention Google outright in an article about industry wide search sales? A better question to ask would, why would they go out of their way to avoid mentioning Apple (hint to enable people such as yourself to spread FUDS). Apples ASP is approaching triple that of the nearest competitor of any relevant size. This means even if a dark horse were to come out of nowhere, they simply wouldn't have the capacity to sell enough high ASP phones to generate a such a shift industry wide.
While their are regional differences in Europe and China, Apple still has owned the premium market for the last decade. Odds that this changed in a single YoY period is almost non existent.
Yes, African phone sales skewing the results. I'll raise you phone sales in the Antarctic!
Your last point, sure if you want to use those mental gymnastics.
The media's supply chain claims are much weaker than this conclusion as they are based on data that has proven historically to be inaccurate. I like how we can't assess if it's a game changer on the results of the upcoming quarter, this will be a convenient out when you once again move the goal post to deflect that you were wrong.
Your analysis and conclusions are sloppy. It's apparent that you are bullish on the iPhone X, but the data doesn't support your conclusion that people are willing to drop a grand on phones.
Basically, your argument is "people are paying 20% - 25% more for phones, so they'll want to buy an expensive phone like the iPhone X".
Here's how I'd look at it:
Fact: The worldwide economy is growing and consumer confidence is high
Fact: People are spending 20-25% more on phones
Assumption: People like the features, form etc of the iPhone X
Conclusion: The market for budget smartphones is weakening
Let's take a similar example using a different industry
Fact: The worldwide economy is growing and consumer confidence is high
Fact: Consumers are spending more at clothing retailers
Conclusion: Market share at low-end stores such as Wal-mart and Target will decline
In this scenario, people are spending more. I would expect to see the uplift mainly in mid-range department stores such as Macy's. While higher end stores may also see some uplift, it would be unwise to predict that Niemen-Marcus was about to see a surge in sales.
Demand for the iPhone X may indeed go up, but your article doesn't support that assertion.
- Nowhere in the article iPhone or Apple is mentioned.
- Only for Europe and to lesser extend China the increase of the ASP is linked to a shift to premium priced models (which could be Apple, but also models of other vendors)
- In Africa the increase of the ASP is linked to the evolution of feature phones to smartphones. I doubt we can assume that there are a lot of iPhones involved here
- In some countries the units sold go down while in to others the unit sold goes up. For South America: Brazil -4%, Chile -18%, Columbia +41%, Argentina +6%. This means that the ASP for South America could change while the models mix in a country remains relatively constant
For me the conclusion of DED is speculation, like the media who claim there is a weaker iPhone demand because some of the iPhone component suppliers publish weaker figures.
We'll have to wait for the Q1 and Q2 results to see whether the iPhone X is a commercial game changer or not.
Hardly speculation. When it comes to flagships, Apple and the iPhone own the market. There aren't enough flagships from Samsung and others to make this much of an impact in the ASP.
You really should read the article. If GFK states that in Africa there is a major shift from feature phones to smartphones, we can expect the ASP going up from $20 to $80, while the market share of Apple doesn't move.
Your analysis and conclusions are sloppy. It's apparent that you are bullish on the iPhone X, but the data doesn't support your conclusion that people are willing to drop a grand on phones.
Basically, your argument is "people are paying 20% - 25% more for phones, so they'll want to buy an expensive phone like the iPhone X".
Here's how I'd look at it:
Fact: The worldwide economy is growing and consumer confidence is high
Fact: People are spending 20-25% more on phones
Assumption: People like the features, form etc of the iPhone X
Conclusion: The market for budget smartphones is weakening
Let's take a similar example using a different industry
Fact: The worldwide economy is growing and consumer confidence is high
Fact: Consumers are spending more at clothing retailers
Conclusion: Market share at low-end stores such as Wal-mart and Target will decline
In this scenario, people are spending more. I would expect to see the uplift mainly in mid-range department stores such as Macy's. While higher end stores may also see some uplift, it would be unwise to predict that Niemen-Marcus was about to see a surge in sales.
Demand for the iPhone X may indeed go up, but your article doesn't support that assertion.
Your are ignoring that most phones people can spend 20-25% more on are mostly those from Apple. Race to the bottom and numerically insignificant flagship failures of the competition does not lend to higher ASPs industry wide. ASP can not increase when customers spend less on phones. We already know Samsung's current flagship phone, the only one that could be meaningful in number, isn't selling.
- Nowhere in the article iPhone or Apple is mentioned.
- Only for Europe and to lesser extend China the increase of the ASP is linked to a shift to premium priced models (which could be Apple, but also models of other vendors)
- In Africa the increase of the ASP is linked to the evolution of feature phones to smartphones. I doubt we can assume that there are a lot of iPhones involved here
- In some countries the units sold go down while in to others the unit sold goes up. For South America: Brazil -4%, Chile -18%, Columbia +41%, Argentina +6%. This means that the ASP for South America could change while the models mix in a country remains relatively constant
For me the conclusion of DED is speculation, like the media who claim there is a weaker iPhone demand because some of the iPhone component suppliers publish weaker figures.
We'll have to wait for the Q1 and Q2 results to see whether the iPhone X is a commercial game changer or not.
Hardly speculation. When it comes to flagships, Apple and the iPhone own the market. There aren't enough flagships from Samsung and others to make this much of an impact in the ASP.
You really should read the article. If GFK states that in Africa there is a major shift from feature phones to smartphones, we can expect the ASP going up from $20 to $80, while the market share of Apple doesn't move.
I thought they didn't mention Apple or iPhone in the article as per your first point in your post. In any case, I will be humbled when it turns out the African cellphone market is responsible the meaning full uptick in ASP. We should know definitively next Wednesday if Apple was the major contributor to the shift, or wait that determination can't be made until yet another quarter has past ... to be continued ad nauseam.
“Apple's iPhone X delivered a KO punch to cheap Androids” implies sales of cheap Androids have ended or nearly so. I don’t believe this is the case.
Part of that knockout punch likely came from the fact the the step up in price of the X allowed Apple to simultaneously extend its iPhone line to its highest number of models, including extending its low end pricing farther downward. It may have partly been the availability of lower priced models that competed against Android at the price-sensitive end of the smartphone market.
What nonsense. ASP went up because the iPhone X costs more. Apple still sold LESS iPhone Xs than they did previous flagships, but the price being higher brings up the ASP. No need for sensationalism.
Fewer per week? That’s the comparison, as the X wasn’t on sale for as long in its debut quarter than previous flagships.
These analysts just hate Apple. They will spin and spin to try to hurt Apple.
Don't sweat it. As long as Apple continues to buyback shares, negative news articles that drive down Apple's share price help Apple to reduce outstanding share count. A lower share count will allow Apple to increase dividends and drive up the EPS, so there is some upside. It's lousy if fake news can actually drive down Apple's share price, but there's nothing to be done about it. In a way, it's Apple's fault for relying so heavily on the iPhone for revenue when Apple certainly has the financial means to strengthen its desktop/laptop offerings and even make some key acquisition like other tech companies are doing. You don't see Amazon standing still and always relying on a single source of revenue.
Most of this drag on Apple has been created by supply chain rumors which continue to be an annoyance for Apple shareholders. Not a solid shred of evidence needs to be presented and these analysts can get by with saying the info comes from anonymous sources. There's always this constant pre-financial quarter chatter for Apple which a lot of stocks don't have to put up with. I can only assume they're deliberately trying to drive down Apple's share price but that still can be a good thing for those who believe in Apple. As they say, it creates a buying opportunity for loyal long-term Apple investors.
Apple has been expanfing its revenue sources. Watch, Airpods, HomePod, services... it almost sounds like you’re faulting Apple for also growing its flagship product line’s revenues and profits as rapidly as it is. I say to Apple, take all the money, regardless of how the percentages split out. And come back around to the Mac, as they are with the iMac Pro and in-development MAC Pro, when the technology catches up (I’m looking at you Intel) or when Apple can in-house processors and GPUs sufficient to convert Macs over to Apple’s own technology stack.
Your analysis and conclusions are sloppy. It's apparent that you are bullish on the iPhone X, but the data doesn't support your conclusion that people are willing to drop a grand on phones.
Hmm yeah except recent analysts are suggesting X is sucking up 35% of ALL smartphone profits. One expensive flagship, single largest profit-holder.
So where are those analyst who predicted very wrong? Doom and gloom for iphone?? They should be fired for giving wrong analyses and causing drops in investors portfolios.
Comments
Apple and iPhone have no need to be mention because they are the market leader and it is universally understood they would be a significant component to the discussion at hand. Would it be necessary to mention Google outright in an article about industry wide search sales? A better question to ask would, why would they go out of their way to avoid mentioning Apple (hint to enable people such as yourself to spread FUDS). Apples ASP is approaching triple that of the nearest competitor of any relevant size. This means even if a dark horse were to come out of nowhere, they simply wouldn't have the capacity to sell enough high ASP phones to generate a such a shift industry wide.
While their are regional differences in Europe and China, Apple still has owned the premium market for the last decade. Odds that this changed in a single YoY period is almost non existent.
Yes, African phone sales skewing the results. I'll raise you phone sales in the Antarctic!
Your last point, sure if you want to use those mental gymnastics.
The media's supply chain claims are much weaker than this conclusion as they are based on data that has proven historically to be inaccurate. I like how we can't assess if it's a game changer on the results of the upcoming quarter, this will be a convenient out when you once again move the goal post to deflect that you were wrong.
Basically, your argument is "people are paying 20% - 25% more for phones, so they'll want to buy an expensive phone like the iPhone X".
Here's how I'd look at it:
- Fact: The worldwide economy is growing and consumer confidence is high
- Fact: People are spending 20-25% more on phones
- Assumption: People like the features, form etc of the iPhone X
- Conclusion: The market for budget smartphones is weakening
Let's take a similar example using a different industry- Fact: The worldwide economy is growing and consumer confidence is high
- Fact: Consumers are spending more at clothing retailers
- Conclusion: Market share at low-end stores such as Wal-mart and Target will decline
In this scenario, people are spending more. I would expect to see the uplift mainly in mid-range department stores such as Macy's. While higher end stores may also see some uplift, it would be unwise to predict that Niemen-Marcus was about to see a surge in sales.Demand for the iPhone X may indeed go up, but your article doesn't support that assertion.
Fewer per week? That’s the comparison, as the X wasn’t on sale for as long in its debut quarter than previous flagships.
https://9to5mac.com/2018/04/17/iphone-x-profits-counterpoint-research/
...Sounds like it's not a sloppy conclusion and you're just butthurt about it. Happens. All the time, actually.