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

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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50 Comments

1. ajac09

Posts: 1482; Member since: Sep 30, 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..

12. quakan

Posts: 1418; Member since: Mar 02, 2011

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

24. ajac09

Posts: 1482; Member since: Sep 30, 2009

nah its fun making people like you angry

31. quakan

Posts: 1418; Member since: Mar 02, 2011

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

13. serious9010

Posts: 254; Member since: Jul 20, 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.

22. ultimatebatman

Posts: 52; Member since: Dec 04, 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.

2. redmd

Posts: 1872; Member since: Oct 26, 2011

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

20. Valdomero

Posts: 592; Member since: Nov 13, 2012

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

26. No_Nonsense unregistered

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

3. No_Nonsense unregistered

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).

50. stevenjklein

Posts: 1; Member since: Jan 01, 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.

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

5. No_Nonsense unregistered

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

6. Nathan_ingx

Posts: 4766; Member since: Mar 07, 2012

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

9. wendygarett unregistered

Nope, I'm original mate :D

8. voxmarc

Posts: 336; Member since: Aug 22, 2012

bah-bah-bah-bah

41. TROLL

Posts: 4851; Member since: Apr 13, 2012

That was funny, Lmfao.....

18. networkdood

Posts: 6330; Member since: Mar 31, 2010

wendy, you have been trained well.

27. RORYREVOLUTION

Posts: 3131; Member since: Jan 12, 2010

The troll is strong with you....

32. anywherehome

Posts: 971; Member since: Dec 13, 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 :-)

7. voxmarc

Posts: 336; Member since: Aug 22, 2012

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

10. Slammer

Posts: 1515; Member since: Jun 03, 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.

19. SuperAndroidEvo

Posts: 4888; Member since: Apr 15, 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

11. rickywinataa

Posts: 262; Member since: Apr 05, 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)

14. darkkjedii

Posts: 30688; Member since: Feb 05, 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.

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.

42. Nathan_ingx

Posts: 4766; Member since: Mar 07, 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.

43. darkkjedii

Posts: 30688; Member since: Feb 05, 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.

15. fistigons

Posts: 368; Member since: Feb 11, 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.

29. darkkjedii

Posts: 30688; Member since: Feb 05, 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

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