The first Apple iPhone became available in June 2007. Since then, it has been through ten generations. Its price has risen, for the most part, as each new one was introduced. The average price of an iPhone approaches $1,000 today, and should top that soon. It reflects the evolution of the iPhone, and the extraordinary power of Apple’s brand, which allows it to charge remarkably high prices for its products.
New data from CounterPoint research posted in the FT shows the expected average price of the iPhone in the fourth quarter will be $944. That is up from $892 in the current quarter, and $873 in the final quarter of last year. The FT analysis pointed out that “The average selling price of iPhones is a key Apple metric for Wall Street, as smartphone sales still account for roughly 50 per cent of the group’s revenues.” Is it any wonder that Apple’s market cap is $2.4 billion, the highest of any American company?
Another factor that has become clear is that the buyers of the current generation Apple iPhone 14 tend to buy the expensive iPhone 14 Pro and iPhone 14 Pro Max. These have faster chips than the less expensive models and a more fully featured camera. Notably, most owners are unlikely to benefit from these improvements and many others. A typical iPhone owner only uses a fraction of its features.
The iPhone is, and has been for over a decade, a visible status product. This has helped push Apple’s brand value to $409 billion, according to Interbrand, well ahead of second place Amazon’s $249 billion number. The high valuation is part of a loop. People buy iPhones because of the strength of the Apple brand. As sales and revenue surge, the brand value rises.
Undoubtedly, part of the iPhone’s increased value is that it works on new 5G superfast wireless networks. This has helped all products in the category as consumers have moved away from much slower 4G.
Apple has additional leverage to improve iPhone sales. The number of apps available for the iPhone stretches into the hundreds of thousand. Its e-commerce service, streaming video and audio services cannot be matched by rivals which include consumer electronics giant Samsung.
Apple has also had the ability to take advantage of addicted customers. It releases new iPhones on a clock that starts every September. Early sales are then boosted by holiday sales from late October until the end of December.
A $1,000 iPhone is just around the corner. Apple will certainly hit that milestone next year.
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