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Last fiscal quarter, Apple announced a drop in iPhone revenue. Going down to $39.67 billion in the quarter. Which is still pretty good, and I’m sure any other smartphone maker would love to have that kind of revenue for phones alone. But there’s a reason why that number is lower now, then when compared to a year earlier.
According to CIRP, which is a research firm, they found that the average retail price of the iPhone in the US was $948 in the third fiscal quarter compared to $988 in the previous quarter.
How can this be? Well, the iPhone 14 and 14 Plus made up about 36% of sales in the quarter. Whereas the year previous, saw the iPhone 13 and iPhone 13 Pro accounting for only 30% of sales in the US. So people are buying the “cheaper” iPhones. But that’s not the only reason.
iPhone buyers are opting to not upgrade their storage, and stick with the 128GB available at the entry-level price. Before this past quarter, the number of people that would upgrade to 256GB, 512GB or even 1TB was far higher. But starting in June, only about 30% of buyers started to upgrade their storage. Compared to 55% a year ago.
iPhone buyers are trying to save money in this recession
The cost of quite literally everything is going up. And those buying a new iPhone are doing what they can to spend less. And it seems for many, that includes not getting a storage upgrade. For a lot of people, 128GB of storage is going to be enough, so seeing this happen is not a big surprise. But keep in mind that it does cost you $300 to upgrade the iPhone 14 Pro from 128GB to 512GB. So it is quite a pricey upgrade.
So what does Apple need to do here? Well, they need to figure out why buyers are not opting for a higher storage variant. Maybe that rumored 2TB iPhone isn’t really needed. After all, the 1TB model is already $1499 (or $1599 if you get the Pro Max version).
Apple is rumored to be launching a higher starting storage for the Pro models this year. Starting at 256GB, which is to help justify the rumored price increase to $1,099 for the iPhone 15 Pro and $1,299 for the iPhone 15 Pro Max. Which could help fix the problem. But let’s get things straight. Apple is not in trouble, financially. They are also not hurting for money. $39.67 billion in revenue from a single product in just 3 months is not a bad thing.
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