The Apple iOS and Android Price Gap Just Gets Wider

February 15, 2016, 1:49 PM UTC
Customers queue outside an Apple store to buy the iPhone 6 in Sydney on September 19, 2014. Hundreds of people queued through the night in Sydney to be among the first in the world to get their hands on the new Apple iPhone 6 models with the large-screen handsets drawing keen interest. AFP PHOTO / Saeed KHAN (Photo credit should read SAEED KHAN/AFP/Getty Images)
Photograph by Saeed Khan — AFP/Getty Images

Sunday’s post “How Apple Sucks the Profit Out of Mobile Phones,” prompted a reader objection:

“I think you should drop the ‘How’ in the headline, as it is not addressed in the text.”

OK. Maybe this chart will help:

Click back and forth between iOS (AAPL) and Android (GOOGL) and you’ll see that the average selling price (ASP) of an iOS device has held more or less steady over the past five years while Android’s ASPs have halved.

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Back in September, market researchers at IDC predicted that smartphone prices would drop 4.6% per year for the next four years. But last quarter, with iPhone unit sales flat and their first-ever decline just three months away, iPhone ASPs actually increased, from $687 to $691.

Faced with a choice between protecting iPhone market shares and iPhone profit margins, Tim Cook stuck with profits.

For more on Apple, watch:

UPDATE: Asymco‘s Horace Dediu begs to differ. “Common misconception,” he tweeted Monday morning. “Apple is not concerned with keeping profits. It’s concerned with prices. Within the price is perception. Apple chooses deliberately to ‘own’ a price point and will never move from it. For 30 years the ASP of a Mac hardly changed. Same with iPod and same for iPhone.”

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