Bloomberg reports that even though the average selling price (ASP) of the iPhone is going to drop from the two year ago quarter, the strong rise in services will make up for it.
Analysts currently predict an average selling price, or ASP, of $688 for the iPhone line in the holiday quarter, down from $691 a year earlier, according to estimates compiled by Bloomberg News.
A $3 decrease might not sound like a lot at first, but once you multiply that by n estimated 76 million iPhones old this quarter, that adds up to be a near quarter billion dollars in revenue. Analyst Mark Moskowitz explains why the ASP may be dropping.
“Recent smartphone customers increasingly are opting for the iPhone 6S,” Barclays analyst Mark Moskowitz wrote in a note to clients this week as he downgraded his recommendation on Apple stock to hold. “We detect increasing concern among industry participants that smartphones in general have evolved technologically to become more than good enough to serve most users’ digital needs over multiple years or until the device breaks.”
Another factor could be the introduction of the iPhone SE. Previously, launching a new iPhone meant an increase in average selling price, however, with the SE the ASP continued to decline.