Neil Hughes
A new survey has suggested 16 percent of U.S. iPhone sales in the June quarter were of the low-end iPhone SE — a number that investment firm UBS believes will push down the average selling price of the iPhone more than expected.
Analyst Steven Milunovich of UBS issued a note to investors on Tuesday, a copy of which was provided to AppleInsider, revealing the results of a 500-person survey conducted in the U.S. by Consumer Intelligence Research Partners. It found that about 9 percent of domestic iPhone sales were of the 64-gigabyte SE model, while another 7 percent came in the 16-gigabyte capacity.
At an estimated 16 percent of total sales for the June quarter, Milunovich said the iPhone SE is outperforming his expectations. But the analyst told investors that he believes the success will have a detrimental effect on Apple's bottom line, dragging down the average selling price of its most profitable product.
Milunovich's latest estimates call for the iPhone ASP to drop to $637 — Â a number he believes is well below Wall Street consensus of about $660.
Another potential factor he cited, as evidenced by the CIRP survey, is capacity. The poll found that the average storage per new phone purchased was down by about 10 percent year over year, which will also affect ASPs.
"A lower ASP is likely due to the success of the SE, most of the channel inventory reduction being 6s, and fewer storage upgrades," Milunovich wrote.
Despite his negative outlook, Milunovich has still maintained a "buy" rating for shares of AAPL, as well as a price target of $115. He believes any struggles seen by Apple will be short-term — UBS's forecasts call for iPhone sales to stabilize in fiscal year 2017, and grow 15 percent in fiscal 2018.
Sponsored Content
Wesley Hilliard
AppleInsider Staff
Andrew Orr
Amber Neely
William Gallagher
35 Comments
Sell more iPhones, stock tanks. Go figure. These anal ysts are never satisfied.
I hope they don't just take this as customers want cheaper phones. Me and several of my colleagues just didn't like the trend of big ridiculous phones. I traded my 6 in for the SE because I hated the size and the power button on the side was a deal breaker. I want an "Air" like option, a truly updated form factor with all of the modern components. The SE has everything I want, but just wish it was thinner and had force touch. I would pay $600 + for that.
Unexpected?
Only to the clueless perhaps. Why are analysts so clueless?
I've been saying since day one that the SE would sell a whole lot. That was obvious to anybody with a clue.
Don't know why people listen and pay this analyst highly educated / experience but can't do simple math. Profit not ASP matters. If AAPL can maintain its profit margin with SE(cost less to make vs 6/6s) who cares about ASP. Most importantly, it is selling more iPhones into the Eco system which add $$ for services i.e Apple Pay,etc