Apple expected to maintain high iPhone ASP with 2018 releases
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The next iPhone line will probably consist of three models, including two OLED variants and an entry level version with an LCD screen, leading to "flattish" average selling price for the fiscal year 2019, according to a new analyst report.
The report by Steven Milunovich of UBS, obtained by AppleInsider, lays out two scenarios for pricing of the next generation of iPhones. The first would have a 6.4-inch OLED model priced at $1,099, a $999 5.8-inch OLED and a $750 6.1-inch model with LCD. An alternative lineup would consist of a $1,050 6.4-inch OLED model, a $900 5.8-inch OLED, and a $700 6.1-inch LCD iPhone.
Importantly, the report predicts 70 percent of users will pay $700 or more for their iPhone this year, despite that number being under 40 percent in prior years.
The device and size predictions are in line with those from other analysts, most recently Amit Daryanani of RBC, who expects three new models, including one 6.1-inch LCD iPhone.
The upcoming lineup, Milunovich writes, "offers another chance to move users up in price with a larger OLED model and a lower entry point for Face ID."
Milunovich wrote that Apple has laid out a three-pronged pricing strategy: "Cascade top-of-the-line features down the price curve (screen size, camera, etc), Move premium customers up the price curve with moderately higher prices, and establish higher price bands based on new features while tapping into lower end markets with older devices."
Indeed, the report also shows a competitive pricing scheme for such older models as the iPhone 8, 8 Plus, 7, 7 Plus and SE.
Apple's first fiscal quarter of 2018 was its best on record thanks to sky-high iPhone ASP. The period, the first full quarter to account for the $999 iPhone X, saw the handset's ASP hit an astounding $796.42, up more than $100 year-over-year.
The report maintains a 12-month Buy rating for Apple, as well as a price target of $190. Milunovich, in February, predicted that Apple would report its best quarter ever; the company indeed posted its highest-revenue quarter.