Taking a deeper look at a closely monitored smartphone metric, the average selling price (ASP), CIRP researchers found that while Apple’s competitors’ U.S. prices were falling last quarter, iPhone prices were rising.
ASPs for smartphones — including Apple’s — tend to fall over time as competition increases and older models get discounted. But that’s not the whole story, and to tease out more information, CIRP produced a graph that shows the distribution of U.S. iPhone sales in four quarters at each subsidized retail price point, from $0 to $399.
These are cumulative curves, and not so easy to read.
In the Dec. 2013 graph, for example, 17% of the phones were free to U.S. customers, and another 16% were $99. Thus, 33% were priced at $99 or less. At the other end, 93% were at $299 or less. Thus 7% are at $399, and 100% are at $399 or less, since $399 is the top subsidized price for a 64GB iPhone 5S.
“Think of it this way,” says CIRP’s Michael Levin. “As a single number, ASP hides some interesting elements of product pricing. The curve expands ASP and shows how much Apple sells at each price point.”
As price curves move to the right over time, ASPs increase. As they move to the left, ASPs decrease.
CIRP’ four that for the iPhone, the price curve has remained relatively stable over the past two years. But through 2012, the price curve moved left, reflecting a lower average selling price. During 2013, the curved moved right, as average selling price increased.