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Average iPhone selling price rising since Android debut

updated 10:30 am EST, Mon December 20, 2010

Competition really smartphones vs. feature models

The average selling price (ASP) of the iPhone has actually gone up since the introduction of phones based on Google's Android platform, an analysis by Asymco's Horace Dediu suggests. In theory, the growing pressure of Android should be forcing iPhone ASPs down. Dediu notes though that not only has the iPhone's ASP increased, but vendors other than Apple have seen only small price erosions.

The competition is not really between iPhone and Android, Dediu suggests. The smartphone market is said to be growing by about 90 percent per year, leaving little need for similar devices to outmatch each other on price. It's makers of conventional "feature" phones that are being forced to drop prices, Dediu remarks. "The more smartphones you build, the more price you can charge," he says. "This is regardless of platform."

Apple is in fact predicted to benefit from a world with a higher overall number of smartphones. "A world full of smartphone users is a better addressable market for iPhones than one filled with voice products," says Dediu. "iPhone's traction was always in markets which had been seeded by some smartphones: the U.S. with [Research in Motion] and Europe with [Nokia's] Symbian. Such a smartphone-soaked world will have better mobile broadband infrastructure, users with more demanding tastes and awareness of the value that a smart device can bring."




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  1. bdmarsh

    Fresh-Faced Recruit

    Joined: Feb 2006

    +8

    I know I went for the 32 GB

    probably people that owned earlier 8 & 16 GB iPhones went for 32 GB versions which would increase the Average Selling Price even though the price of the iPhones hasn't changed.

  1. malax

    Fresh-Faced Recruit

    Joined: Aug 2006

    +3

    economics

    The hypothesis that competition would drive down the price for iPhones is based on a faulty assumption. This is basic Economics 101: competition, the availability of substitute products will, all other things equal, drive down the demand for something (shift the demand curve), and generally this will lower the price and the quantity sold. There are lots of things wrong with this though. First, lots and lots of things are changing as well. People are seeing more value in smart phones, increasing demand. Apple is selling iPhones as fast as they can make them, so supply and demand are not in equilibrium. And Apple goes to great lengths to avoid price competition on their products, so the price of iPhones doesn't fluctuate in direct response to demad shift like a commodity product.

    So the real headline should be something like "more people opting for higher capacity iPhones--and willing to pay a higher price." The whole "iPhone prices should have dropped" statement is just bad analysis.

  1. que_ball

    Fresh-Faced Recruit

    Joined: Aug 2000

    +2

    Buying unlocked unsubsidized phones

    This could also be people buying the unlocked and unsubsidized phones directly from the Apple store instead of the locked version from their carrier. (Obviously in the countries where unlocked iphones are sold)

    Or people who upgrade early and are not eligible for another subsidy and need to pay a higher price to get it.


  1. dliup

    Fresh-Faced Recruit

    Joined: Jan 2006

    +2

    Early upgrade

    I've paid $499 for early upgrade, but sold my old one for $400.

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