Apple's push for bigger iPhone screens expected to drive services profits
The increased costs of making larger displays is small compared to the extra revenues they will bring by driving greater use of the iPhone and tailoring to Apple's forthcoming video services, according to a new analysis.
Apple's "Gather round" event is expected to see the company step up the screen size in two of its three new iPhones by an average of 23 percent compared to last year. According to the Wall Street Journal (article requires subscription), this increase in size will boost initial sales and then also increase owners' use of the phones.
The replacement for last year's iPhone X is expected to retain that phone's 5.8 inch display. However, the replacement for the iPhone 8 is believed to be increasing its screen to 6.1 inches and there's to be a Plus-sized version at 6.5 inches.
Phone size comparison, by Wall Street Journal
"The bigger the device, the more people are getting out of it," analyst Jennifer Chan of research firm Kantar Worldpanel told the Journal. "And the more opportunity there is for Apple to generate money from them."
Kantar Worldpanel claims that users with smartphone screens 6 inches or larger typically use twice as many apps as those with 5.5 inch screens..
The Journal says that it costs Apple $33 more to make Plus-sized models of the iPhone and that the company then charges $100 extra. "As a result, Apple pocketed nearly $77 more profit from the iPhone 8 Plus [than the iPhone 8]," says journalist Tripp Mickle.
Analyst Carolina Milanesi, previously of Kantar and now with research firm Creative Strategies, told the Wall Street Journal that: "The larger screen is not just about real estate. It's a much broader play that benefits the Apple ecosystem."
Milanesi believes the bigger screens make watching TV shows and films more appealing and so expects this to help with Apple's video streaming plans.
Currently there are 1.3 billion iPhones is use and Apple earns an average $30 per device annually from services such as Apple Music, according to estimates by Morgan Stanley.
Apple's "Gather round" event is expected to see the company step up the screen size in two of its three new iPhones by an average of 23 percent compared to last year. According to the Wall Street Journal (article requires subscription), this increase in size will boost initial sales and then also increase owners' use of the phones.
The replacement for last year's iPhone X is expected to retain that phone's 5.8 inch display. However, the replacement for the iPhone 8 is believed to be increasing its screen to 6.1 inches and there's to be a Plus-sized version at 6.5 inches.
Phone size comparison, by Wall Street Journal
"The bigger the device, the more people are getting out of it," analyst Jennifer Chan of research firm Kantar Worldpanel told the Journal. "And the more opportunity there is for Apple to generate money from them."
Kantar Worldpanel claims that users with smartphone screens 6 inches or larger typically use twice as many apps as those with 5.5 inch screens..
The Journal says that it costs Apple $33 more to make Plus-sized models of the iPhone and that the company then charges $100 extra. "As a result, Apple pocketed nearly $77 more profit from the iPhone 8 Plus [than the iPhone 8]," says journalist Tripp Mickle.
Analyst Carolina Milanesi, previously of Kantar and now with research firm Creative Strategies, told the Wall Street Journal that: "The larger screen is not just about real estate. It's a much broader play that benefits the Apple ecosystem."
Milanesi believes the bigger screens make watching TV shows and films more appealing and so expects this to help with Apple's video streaming plans.
Currently there are 1.3 billion iPhones is use and Apple earns an average $30 per device annually from services such as Apple Music, according to estimates by Morgan Stanley.
Comments
I'll bet part of the "optimal" equation was the cost of larger screens making them less attractive to buyers not yet familiar with the concept of a touchscreen pocket computer that makes phone calls.
What buyers would most readily accept would also form part of the "optimal" assessment. In a world full of flip phones, consumers would have freaked out at the notion of something the size of an iPhone Plus because at that point they had no idea how they would benefit from the extra size. And there wasn't as much benefit then as there is now, as applications for the category hadn't yet evolved to exploit it. They have now, which further alters the "optimum" equation.
I'm sure it's frustrating for those who prefer a smaller device, but the fact that 3.5 inches was optimal back then does not mean it still is.
cest la vie. I’ll still buy whatever smallest flagship iPhone there is. Just wishful thinking to have a sub 4.5” iPhone that is not an SE.
Nunzy doesn't quite cross the line of clearly breaking rules, but his/her posts are of such an incredibly bad quality that there should be some kind of limit. Nearly every story he bursts in with some inane one-liner, usually near the top of the comments, and then leaves. Frankly, his first post here on this thread was one of his best, and that's not saying much. Followed up by another one-liner inane comment.
At one point I actually wondered if Nunzy is actually an experimental bot.
Ultimately, commenters here either make the site more interesting or less interesting. There are a few PITA commenters (we all know who they are) that we mostly disagree with, but at least they bring conversation to the table. I don't feel like there's any question that Nunzy is a drag on the site. I realize I don't get a "vote", but if I did, he'd be off the island.
I'm not sure what else to do or say, but maybe if others of you agree you could give this comment a thumbs-up (faster/easier than taking the time to write a comment). If several people do, maybe there's something to be done, if no one cares, I'll shut back up.