iPhone 11's popularity could negatively impact iPhone ASP

With iPhone 11 and iPhone 11 Pro now available analysts are starting to wonder how sales numbers will affect Apple's iPhone average selling price (ASP). According to analysts at Deutsche Bank, ASP might actually go down this year.

The bank issued a note to investors warning that iPhone ASP could fall as much as 6% during fiscal year 2020, with cheaper iPhones making up for as much as 40% of sales. Interestingly that figure doesn't appear to include iPhone XR either. Apple chose to keep iPhone 8, iPhone 8 Plus, and iPhone XR around when introducing the 2019 iPhone lineup. All of them are considerably less costly than Apple's flagship models and will absolutely appeal to the budget conscious buyer.

Analyst Horace Dediu recently shared a graph showing how iPhone ASP has performed over the years. It's notable that it has remained relatively consistent throughout, sitting at around the $650 mark.

While the belief by some is that Apple will be able to make up what it loses in ASP by selling additional volume, not everyone agrees. Analyst Jeriel Ong isn't convinced at all.

Ong noted that cheaper prices could yield higher unit sales, although "we do not yet have a strong enough sense of how pricing, in conjunction with the new feature sets of the new iPhones, will impact overall unit demand." He added that he was unsure whether the decline in ASPs "can be adequately offset by a commensurate rise y/y in units." Deutsche Bank has a hold rating and $210 price target on Apple shares.

Apple no longer shares sales numbers for iPhone, but initial estimates by analysts have been positive. We're still less than a week into the iPhone 11 lifecycle and we'll surely hear more sales estimates in due course.

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