Apple Inc sold fewer iPhones than expected in the first three months of the year, but that bare statistic hides an important bright spot for the company. The average selling price of an iPhone grew more than it has since the days of the iPhone 6.
Apple does not release figures for how many of each model it sells, but executives pointed to the premium-priced iPhone 7 Plus, which sells for up to US$969 fully loaded, as the key to boosting the amount it gets on average for each handset.
The average selling price of iPhones is important to Apple because the smartphone market is maturing and its growth slowing. Apple’s ability to get more cash for each smartphone sold is critical to growing its profits.
“One of the things that we did not get right was the mix between the iPhone 7 and the iPhone 7 Plus,” Apple chief executive officer Tim Cook told analysts on the company’s earnings conference call on Tuesday, in response to a question about how supply of its top-end handset was constrained during the holiday shopping season.
“The demand was much stronger for the 7 Plus than we had predicted and so it took us a little while to adjust all the way back through the supply chain and to bring iPhone 7 Plus into balance, which occurred this past quarter,” he said.
The popularity of the iPhone 7 Plus represents a triumph for Apple with a new departure: Packing a unique feature into its most expensive iPhone.
The iPhone 6 Plus differed from its smaller sibling only in screen size, but the 7 Plus model has a physically different camera that enables what Apple calls “portrait mode” for taking shots with a blurred background — a feature more commonly found on large, expensive digital cameras.
It is a strategy Apple could use again. Many analysts believe the company is to reserve certain features for the premium-priced model of its next, eagerly awaited iPhone — such as a higher-quality display — that could sell for more than US$1,000.
The 10th-anniversary iPhone range might also have features such as wireless charging and 3D facial recognition.
Apple sold 50.76 million iPhones in its fiscal second quarter ended April 1, down from 51.19 million in the same period the previous year.
Analysts on average had estimated iPhone sales of 52.27 million, according to financial data and analytics firm FactSet.
Despite the dip in unit sales, iPhone revenues rose 1.2 percent in the quarter, helped by a higher average selling price.
The company’s net income rose to US$11.03 billion, or US$2.10 per share, compared with US$10.52 billion, or US$1.90 per share, in the same period last year.
Analysts had on average expected US$2.02 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 4.6 percent to US$52.90 billion in the quarter, compared with analysts’ average estimate of US$53.02 billion.
Apple’s revenue from the Greater China region fell 14.1 percent to US$10.73 billion in the quarter, as cheaper rivals in the region chipped away at sales.
Apple chief financial officer Luca Maestri said that sales of Apple Macs and the company’s services were strong in China during the quarter.
“The performance we’re seeing in China should get better going forward this year,” he said.
RSS