Apple Apple should experience record average selling prices (ASPs) for iPhones in the December quarter with my estimate coming in at $ 690 vs. the Street's average of $ 660. This will be driven by the 6 Plus costing $ 100 more than any previous iPhone for the same memory configuration and by pricing 64GB memory versions only $ 100 higher than the entry 16GB versions. It could come in a bit higher but the stronger dollar should dampen the rise. (Note that I own Apple shares).
Previous record was $ 647 in the December 2011 quarter
For the past three fiscal years Apple's December quarter has had the highest iPhone ASP. This is largely due to initial buyers opting for higher memory models and this year should be no exception.
For the previous three years (December 2011, 2012 and 2013) the iPhone's September to December quarter ASP increase has been 4.1%, 3.7% and 10.3%, respectively. In dollar terms the increases have been $ 25, $ 23 and $ 60, respectively. In the September 2014 quarter the iPhone's ASP was $ 603 so to hit my $ 690 estimate the sequential ASP change needs to be 14.4% or $ 87.
One sign that Apple's iPhone ASP could rise so much is that in the September 2014 quarter the ASP increased by 7.5% and this is with the iPhone 6 and 6 Plus only being available for 9 days. In the previous three years the June quarter to September quarter iPhone ASP increase has been negative 3.6%, an increase of 1.8% and a decrease of 0.7%, respectively.
I have built a model with three scenarios on what percentage Apple's iPhone 6 and 6 Pluses were sold along with various memory configurations. I also adjust for previous models based on the previous year's projection vs. actual. While it is a fairly straight forward model (all cases assume 75% iPhone 6's and 25% 6 Plus's) and I only change the memory percentages the overall results are close to each other. The results average to an ASP of $ 689 which I rounded to $ 690. I have developed a Google Doc that has the assumptions and results via this link.
One indication of memory mix is Japan's iPhone sales
I have been following iPhone sales in Japan via the BCN website which tracks smartphone sales. Besides Apple's iPhone 6 being the dominant smartphone in the December quarter the 64GB models have held the top position all three months and two of the top three. While I don't have any market share percentages I believe it does show the strength of the 64GB versions.
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