The iPhone has always been an expensive product with a price tag greater than the average selling price of smartphones. Till the iPhone 7, the starting price of the flagship phone was stuck at $649. However, with the iPhone X, the company increased the price drastically of its flagship phone – with a starting price of $999.
Apple did introduce iPhone 8 alongside the iPhone X to have a cheaper alternative. However, because of the edge-to-edge display, people clamoured to get the iPhone X. Since then, the company unveiled the iPhone XR and iPhone 11, cheaper alternatives to the flagships. The iPhone XR started at $749, a price tag still higher than the flagship price of 2016 ($649).
In the process, the average selling price of the iPhones shot up drastically. However, with the iPhone 11, the company reduced the price by $50 when compared to the iPhone XR. Also, the company continues to sell the iPhone 8 and the iPhone 8 Plus for a reduced price. According to the Deutsche Bank, all these changes could lead to a major drop in the average selling price (ASP) of the iPhones. It expects to see a drop between 4% and 6% in FY 2020.
The cheaper models would be more popular
According to Jeriel Ong, an analyst; the iPhone 8, the iPhone 8 Plus, the iPhone XR, and the iPhone 11 could account for 40% of the sales of the iPhones over the course of twelve months (until the release of the next iPhone). However, Ong also notes that reduced selling price of the iPhones could lead to higher sales which could lead to higher yield of unit sales.
Ong does also notes that he expects to see a greater number of units being shipped but also said that he wasn’t sure about it by adding “we do not yet have a strong enough sense of how pricing, in conjunction with the new feature sets of the new iPhones, will impact overall unit demand.”