- Tram Ho
There are plenty of reasons for Apple fans to be excited about the company’s superior business results in the last quarter. However, there was one person who was not very happy with the result: Barclays analyst Tim Long.
In his note to customers, Long wrote that, with the business results last quarter, the average price of the iPhone is sliding.
Since last year, Apple has begun to stop posting sales for each iPhone version. Instead, they focused on increasing the average selling price on each of their iPhones. Even so, this is probably not enough.
” IPhone sales have come in, but we believe ASP (average selling price) is declining, ” Long wrote in his note. The analyst believes that the average selling price of iPhones in the last 3 months of 2019 will be reduced by 10% compared to the same period last year. Overall, the analyst said that for the whole of 2019, the average selling price will decrease by 12%. Next year, this price could even drop another 6.5%.
This decrease in average selling price is the result of Apple continuously lowering its iPhone prices. The iPhone 11 starts at $ 699, $ 50 cheaper than last year’s iPhone XR. Part of the reason for the price reduction is to increase the number of users and subscribers of Apple’s paid services.
While Long is a supporter of this strategy of Apple, he does not predict how low the average selling price may be. He also said that this could damage Apple when next year’s iPhone 5G launch is near.
Many analysts are now excited about the first 5G iPhone as it could be a leap forward for Apple’s business. Meanwhile, Mr. Long said that Apple will face challenges when it comes to calculating prices high enough without affecting demand. Especially after the price cuts last year.
Apple stock is currently trading at $ 255.82. This price brought Apple’s market capitalization to a record high of 1.14 trillion USD.
Source : Trí Thức Trẻ