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Apple's magical 'average selling price' not so magical anymore

Posted: , by Ray S.

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Apple's magical 'average selling price' not so magical anymore
One of the things that financiers admire Apple for is its incredibly high ASP, or average selling price. It is simply the average price it's selling its products at. For example, if we sell you one $400 phone and one $200 phone, our ASP will be $300.

Now, the story is that Apple's sky-high ASP has been going down lately. According to the Consumer Intelligence Research Partners, or CIRP, users have bought more last-gen iPhones and iPhones with lower storage capacities compared to previous years. We can probably explain this by acknowledging the fact that Apple currently has a line-up of very attractive products, including the iPhone 4, which is currently available for free on contract. The cool legacy models available, plus consumers going for smaller capacity iPhones have caused Apple's notoriously high ASP to go down a bit during the recent months.

The short-term lose of profits, however, might translate into a long-term win, as by offering customers iPhones for free, Apple is effectively expanding its market reach, meaning that more consumers may get entangled in its software ecosystem. And once a user invests a considerable amount of money in apps, they are less likely to make a switch to another platform. Whether that is the reasoning behind Apple's tactics, though, we cannot be sure.

via: AllThingsD

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posted on 04 Dec 2012, 07:12 16

1. ajac09 (Posts: 1367; Member since: 30 Sep 2009)


if this was about android they would have ended bashing android about price cuts but apple they praise and go on about how awesome it would be to give away free phones iphonearena doesn't change..

posted on 04 Dec 2012, 07:39 22

12. quakan (Posts: 1176; Member since: 02 Mar 2011)


You could just stop coming to "iphonearena"...

posted on 04 Dec 2012, 07:56 4

24. ajac09 (Posts: 1367; Member since: 30 Sep 2009)


nah its fun making people like you angry

posted on 04 Dec 2012, 08:32 12

31. quakan (Posts: 1176; Member since: 02 Mar 2011)


I'm not angry, it just seemed like you were pretty angry at "iphonearena" so I offered you some relief.

posted on 04 Dec 2012, 07:41 1

13. serious9010 (Posts: 254; Member since: 20 Jul 2012)


@ajac09: Not true. It's you who chooses to read and remember only what you want to read and remember. Besides, if phone arena chooses to publish pro-apple articles it's a fault of users like you, who persistently give them views and publicity, which they wanted to achieve in the first place.

posted on 04 Dec 2012, 07:54 3

22. ultimatebatman (Posts: 52; Member since: 04 Dec 2012)


I have to disagree- phonearena consistently implies that Android is the better OS in all their comparisons (because it is) and rarely do they fanboyishly gush over any product. You have them confused with Gizmodo, the #1 Apple fanboys of the internet.

posted on 04 Dec 2012, 07:14

2. redmd (Posts: 880; Member since: 26 Oct 2011)


the average selling price should be based on those free on contract phones. iPhones still disproportionately expensive.

posted on 04 Dec 2012, 07:50 1

20. Valdomero (Posts: 121; Member since: 13 Nov 2012)


In my country an iPhone is sold from $899.00 to $1000.00

posted on 04 Dec 2012, 08:09

26. No_Nonsense (Posts: 826; Member since: 17 Aug 2012)


In my country 4 (8GB) for $500, 4S(unknown capacity) for $720ish and 5 from $900 to $1100.

posted on 04 Dec 2012, 07:20 4

3. No_Nonsense (Posts: 826; Member since: 17 Aug 2012)


Or perhaps, iPhone sales are declining. People will buy the iPhone 4/4S because they are cheaper and the iPhone 5 simply because they want to experience the iPhone/Apple brand name. But there are people who haven't switched to the iPhone 5 from a previous iPhone since they weren't quite happy with what it offered over existing models. Surely, people buying cheaper/older devices has contributed but so has the "meh" reaction to the iPhone 5 (even though it is the fastest selling phone in Cook's words).

posted on 01 Jan 2013, 14:17

50. stevenjklein (Posts: 1; Member since: 01 Jan 2013)


The latest smartphone sales data from Kantar Worldpanel ComTech shows iPhone accounted for 53.3% of US smartphone sales for the 12 weeks ending November 25.

Probably would have been higher, but they're still backordered.

posted on 04 Dec 2012, 07:20 3

4. wendygarett (unregistered)


I'm not so sure the "average selling price" really means, but one thing for sure is Apple will definitely grab my money!! :D

posted on 04 Dec 2012, 07:22 12

5. No_Nonsense (Posts: 826; Member since: 17 Aug 2012)


You don't need to remind that to us every single time.

posted on 04 Dec 2012, 07:23 9

6. Nathan_ingx (Posts: 3007; Member since: 07 Mar 2012)


You definitely have a split personality disorder here don't you??

posted on 04 Dec 2012, 07:34

9. wendygarett (unregistered)


Nope, I'm original mate :D

posted on 04 Dec 2012, 07:31 5

8. voxmarc (Posts: 299; Member since: 22 Aug 2012)


bah-bah-bah-bah

posted on 04 Dec 2012, 15:53

41. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)


That was funny, Lmfao.....

posted on 04 Dec 2012, 07:49 7

18. networkdood (Posts: 6267; Member since: 31 Mar 2010)


wendy, you have been trained well.

posted on 04 Dec 2012, 08:15 4

27. RORYREVOLUTION (Posts: 2959; Member since: 12 Jan 2010)


The troll is strong with you....

posted on 04 Dec 2012, 08:36

32. anywherehome (Posts: 971; Member since: 13 Dec 2011)


We know that stupidity wins for Apple a lot :-)
You would even defend Apple's successful eBook's artificial price increasing for the whole world :-)

posted on 04 Dec 2012, 07:30

7. voxmarc (Posts: 299; Member since: 22 Aug 2012)


Ho-hum....uhu iphonearena uhuh...cough cough

posted on 04 Dec 2012, 07:36 7

10. Slammer (Posts: 999; Member since: 03 Jun 2010)


This has been the reasoning behind Apple for 30 years. Proprietary paid accessories, programs and now itunes and Apps. This all leads to being locked into their system and leads to throwing all that away and the money you spent if you leave.

This is the number one reason why friends and colleagues haven't ditched Apple. Most have thousands of dollars wrapped up into the ecosystem. A few have cut their losses and happily moved on.

Our generation left Apple by the curb for trash due to this controlled lock down practice. Thanks to savvy marketing, this generation fell for pretty things without thinking about how Apple swindles cash out of their consumers and has made it one of the richest companies in the world within such a short time.

Good job people.

John B.

posted on 04 Dec 2012, 07:49 3

19. SuperAndroidEvo (Posts: 3981; Member since: 15 Apr 2011)


Yes but it's only a matter of time before the circle repeats itself. No one likes to be locked down & that is Apple's bread & butter like you said for the last 30 years.

Apple is savvy (I give you that) but that savvy attitude can only get you so far. (It will fail sooner or later.) It's only a matter of time until the new people see this & leave Apple by the curb for trash as you stated.

+1

posted on 04 Dec 2012, 07:38 1

11. rickywinataa (Posts: 262; Member since: 05 Apr 2012)


google had been bashing the standard on phone prices nowadays. nexus 4 for $350, nexus 7 for $199, it makes people think why can't apple sell their devices for less price (not necessarily the same price because apple is still a profit based company by selling devices)

posted on 04 Dec 2012, 07:42 1

14. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


I think this is a smart move by apple, with android dictating the low cost market with some great low cost devices, apple should do the same. Android has become an excellent platform, just as good as iOS and n some cases even better, I feel apple should not only sell legacy devices, but also release a all new low cost off contract iPhone. One thing I like about Sammy and Htc is that they have had low end versions of flagship phones, like the gs3 mini, and Htc evo design 4g. This would only diversify apples portfolio.

posted on 04 Dec 2012, 08:17 1

28. KennyWRX (unregistered)


I disagree. You can already get Android flagships for dirt cheap, why even bother? Not to mention, delays in OS upgrades is directly proportional to the number of phone configurations offered.

posted on 04 Dec 2012, 16:28 1

42. Nathan_ingx (Posts: 3007; Member since: 07 Mar 2012)


Oh, i see what you've been up to!
Now you say a lesser, cheaper, more pocket friendly version of the Android flagships are good. And if Apple did the same on their phone line-up, it would "only diversify Apple's portfolio"...
I thought Apple's single, straight, similar and stagnant build was iconic and should remain untouched...according to you Darkky.

posted on 04 Dec 2012, 17:16

43. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


Never said that Nathan, and if u find where I did, please provide the link so everyone can see me put my foot n my mouth.

posted on 04 Dec 2012, 07:44 3

15. fistigons (Posts: 262; Member since: 11 Feb 2012)


What is wrong with you people the 20 articles a day that phonearena writes about Windows/Android/everything else aren't good enough for you? You have to bash every single Apple article? Get a life. PS The iphonearena comment is getting old too.

posted on 04 Dec 2012, 08:24 4

29. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


Yes the iphonearena comments r getting old, have gotten old but u have to understand is that this site is overrun by closed minded, narrow minded anti apple android users, who wake up every morning, and troll PA for apple/iOS/iPhone articles to bash apple and disrespect iOS/iPhone users. You'd think if they hate apple so much, they wouldn't even bother clicking on the article, but the fact that they do lets u know what they're all about. So get used to it...I have

posted on 04 Dec 2012, 09:26 3

33. quakan (Posts: 1176; Member since: 02 Mar 2011)


Amen.

posted on 04 Dec 2012, 10:08

34. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


They crack me up though with their uncreative comments, that they think matter.

posted on 04 Dec 2012, 10:19

36. quakan (Posts: 1176; Member since: 02 Mar 2011)


Many of them are just over-the-top trolls looking to get the most thumbs up on an article.

posted on 04 Dec 2012, 11:01

37. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


Exactly, I've been saying that forever.

posted on 04 Dec 2012, 07:46 3

16. -box- (Posts: 3778; Member since: 04 Jan 2012)


I'd hardly call any lineup of iPhones "attractive". Ray, you're slipping again.

posted on 04 Dec 2012, 08:30 1

30. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


That's ur opinion. Millions more can, and do.

posted on 04 Dec 2012, 07:47 6

17. remixfa (Posts: 13903; Member since: 19 Dec 2008)


Ray, you know better than to think Apple is going to give away products in hopes that people will get tied into their ecosystem. That is a Google move. Apple's MO has been profits profits profits at the cost of everything else including market share. That has never changed. The move is desperation to stay relevant in the market as it continues to lose to the android onslaught and has new challenges from MS... both of which take up all sides of the spectrum. The move is forced and desperate. If there wasnt incredible pressure on them, there would still be no such thing as a free iphone.

posted on 04 Dec 2012, 08:08 3

25. SuperAndroidEvo (Posts: 3981; Member since: 15 Apr 2011)


Apple lockdown approach is their claim to fame. Because of that mentality they almost were left for dead in the mid 90's, but then came the iPod & they were saved. Then the iPhone put them in the forefront & they are at an all time high.

It seems history is repeating & it looks like their days of innovation are over. The late 80's are starting now for Apple & the decline of the early 90's is going to start VERY soon if it hasn't started already.

Android is toppling Apple now, as Microsoft did to them in the late 80's & 90's.

posted on 04 Dec 2012, 10:10

35. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


Man I bet apples shaking n their boots after reading that lol. NOT

posted on 04 Dec 2012, 11:17 1

38. SuperAndroidEvo (Posts: 3981; Member since: 15 Apr 2011)


Perfect example of the 80's/90's mentality.

Did you really just throw me a "NOT" joke? How 80's/90's of you. lol

posted on 04 Dec 2012, 17:17

44. darkkjedii (Posts: 10956; Member since: 05 Feb 2011)


Hey I grew up n the 80's lol. I still say totally

posted on 04 Dec 2012, 14:24

40. Aeires (unregistered)


A couple of years ago I read an article where one of the top Apple engineers made a statement about early adapters. He said if they don't get them to buy an iPhone, they'll likely buy an Android phone and forever be locked into that ecosystem. A large dose of the Apple profits come from repeat customers, and they'll do what they feel they have to in order to keep them. While it goes against Apple's image to have phones free on contract, they know they'll make it up in iTunes and app sales, just like Amazon does with the Kindle Fire series. Desperation or adaptation to an every changing market? Debatable and certainly interesting to follow.

posted on 04 Dec 2012, 07:51 5

21. networkdood (Posts: 6267; Member since: 31 Mar 2010)


Apple has been selling a 99c model iphone and a 99.00 iphone for quite some time now. People are NOW just realizing that the 199.99 is not worth the price? Wow...talk about slow on the take.....

posted on 04 Dec 2012, 07:55 1

23. -box- (Posts: 3778; Member since: 04 Jan 2012)


What isn't explained is the subtext. Investors aren't happy because not only is the ASP going down, but that means that (1) customers aren't as enthralled with the latest models, and therefore not spending the extra money for them, (2) the customer base who the company is used to spending money on apps and stuff are spending less and using free options when they can, if they even bother downloading apps, (3) even with these phones being cheaper to purchase, they're still witnessing folks with phones that cost the same that are much more capable, with larger screens and extra features that apple only recently started offering (like LTE) or don't (or won't) offer (NFC, better and larger screens and cameras, etc.) (4) apple still hasn't fixed the underlying problems with the 4 and 4S models causing the same high return and exchange rates (especially for the 4), and (5) as a result apple's profits are going down, and they're getting more desperate.. There's a few other subtleties, but these are the more notable ones.

posted on 04 Dec 2012, 13:59

39. rusticguy (Posts: 2826; Member since: 11 Aug 2012)


Google's aggressive prcing will force it further down :)

posted on 04 Dec 2012, 18:46 2

45. phil2n (Posts: 466; Member since: 30 Apr 2012)


2013 apple is on the level of RIM..
Android # 1
WP # 2

posted on 04 Dec 2012, 23:18 3

46. yajia1 (Posts: 107; Member since: 22 Aug 2012)


LOL. Stupid writer. I have been working in customer service for quite a while now, there has long been "free" iPhones. I wrote "free" because Apple is still getting $$$ from them, it's the carriers at lost. Not Apple. If I am ever to credit anyone for "free" iPhones, I sure, am not going to put it on Apple. Apple is all about the money. Always has been and always will be.

posted on 05 Dec 2012, 03:32

47. Reluctant_Human (Posts: 852; Member since: 28 Jun 2012)


Most people that I know that have iphones only use it for simple things such as instagram, facebook, pinterest etc.so it makes sense that a lot of these people opting for 8 and 16GB phones instead of 64 and espcially since the price difference is pretty insane.

posted on 06 Dec 2012, 22:49

48. roscuthiii (Posts: 1788; Member since: 18 Jul 2010)


Ah yes... My mom and step-dad just each upgraded their old EnV Touch and Droid Bionic to an iPhone 4 taking advantage of these cheap iPhone deals. Neither of them are very happy right now. They're finding a distinct lack of functionality in the IOS ecosystem, unless of course they want to lock themselves by buying non-transferable apps in the walled garden.
Another issue for them being they're finding that some of what they're looking for has made it's way onto newer iPhones/newer versions of iOS. My step-dad's exclamation was, "I thought they said Droid was the fragmented one!" (And then he went on a string of what would be deleted expletives.)

posted on 07 Dec 2012, 02:49

49. chinamagictricks (Posts: 1; Member since: 07 Dec 2012)


A lot of magician become the people idol,some simple magic tricks Integration into the people's lives and enrich people's enjoyment of life.The magic props increasingly welcomed by people. Welcome to the Magic Cabin.

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