Is Apple’s Pricing Scheme Hurting Its Profits?
The strategy Apple adopted a couple of years ago of continuing to sell older iPhone models at reduced prices has helped broaden adoption and penetration at the lower end of the market. But another side-effect is that it reduces the average selling price (ASP) of Apple phones, and also the subsidy that they get from carriers. The implication is that this will lower their gross profit margins from the iPhone business, which has been the leading profit generator for the company. All of this is of concern as new research estimates that the iPhone 5 accounts for significantly lower percentage…