Apple will rely more on the average iPhone price increase too grow its revenue

After Apple released its fourth-quarter earnings report, Apple said that in the future, Apple will increasingly rely on the iPhone’s average selling price increase and service revenue increase to achieve revenue growth. JPMorgan analyst Samik Chatterjee said in an investor report that Apple “has succeeded again” in guiding people to turn to their most expensive iPhone models. This year’s models are iPhone XS and iPhone XS Max. At the same time, Apple’s service revenues, including the App Store, Apple Music and iCloud, have grown to nearly $10 billion. 

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Robert Cirha of Guggenheim also expressed the same view. He said that Apple’s decision to stop publishing iPhone, Mac and iPad sales may be to make consumers feel less obvious, and Apple wants to charge them more. Apple is often criticized for its high price, which has intensified this fall, as the cheapest new iPhone is also priced at $749. 

Gene Munster of Loup Ventures believes that Apple wants investors to see the entire business as a service rather than quarterly volatility. He said: “The new reporting method will force Wall Street to use Apple’s business as a stable and growing service, which will result in a higher price-earnings ratio.” The analyst pointed out that in the past eight quarters, the iPhone average growth is only 1%, and by definition, the average growth of 1% is stable. 

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