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For iPhone 8 to succeed, Apple must buck history

July 15, 2017 2:03 PM
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For iPhone 8 to succeed, Apple must buck history

Everyone is hoping that Apple's next iPhone — "iPhone 8," allegedly — will be awesome. But it's not until you see these charts from analyst Sherri Scribner and her team at Deutsche Bank that you realise just how high the mountain is that Apple must climb with the upcoming launch, scheduled for September.

For iPhone 8 to be regarded as a success, Apple must do something it has only ever done once before: Grow its sales faster than the market as a whole and take market share from other companies.

Historically, Apple's phones have only ever sold to about 15% of all users globally. They are expensive, and Apple has creamed off the high-end users and the profits that go with them.

That has not been a problem — until the last year or so. When the market was growing Apple got 15% of that growth and grew with the market. Now, however, the market has stopped growing. Everyone who wants a phone now has one. So Apple has a different sales problem in front of it than the one it is used to.

These charts illustrate how Apple is boxed-in at a price-point in the market that may make iPhone 8 look like a failure.

Apple has kept the average selling price (ASP) of iPhone between $600 and $700. But in the market as a whole, the average price is now under $300 and falling. The rumour is that the new iPhone might cost more than $1,000.

For iPhone 8 to be regarded as a success, it must actually add new iPhone sales — something Apple hasn't meaningfully done since 2015.


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