We have seen that a lot was said prior to the launch of Apple’s latest iPhone 11 series in the market. There was a concern in the market as regards to Apple and the declining sale of its iPhones. However, Apple has managed to turn everything around with the help of its latest iPhone 11 which is a successor to the iPhone Xr from last year.
Apple has not only changed the name of its first R series device, it has also lowered its price by $50. Now, you would say that this would not make a massive difference. However, the markets will tell you a different story as lowering the price of iPhone 11 has indeed made a major difference.
There has been a lot of demand for the iPhone 11 which starts at just $699 all around the world and also in the US. However, this means that there is another aspect of iPhone sales which comes into account. This is regarding the average selling price of Apple’s iPhones around the world including the US.
Analysts have always maintained that Apple has the highest ASP amongst every other smartphone manufacturer in the world. This was true until now because there were no lower-priced iPhones available in the market. But now that the iPhone 11 is priced even lower than average iPhone prices at launch, we will see a different reflection in the markets.
Analysts have already started predicting that due to iPhone 11’s demand, Apple’s average selling price will go down. Some analysts have said that iPhone 11’s lower price tag will help Apple sell more units which means that even with low ASP, they can make up for the revenue due to higher volumes. However, Deutsche Bank analyst Jeriel Ong does not share the same feeling.
Ong noted that cheaper prices could yield higher unit sales, although “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.” He added that he was unsure whether the decline in ASPs “can be adequately offset by a commensurate rise y/y in units.” Deutsche Bank has a hold rating and $210 price target on Apple shares.
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