Stabilization of iPhone storage upgrades safeguards ASP
Despite analyst concerns over falling iPhone sales volumes, consumers opting for storage upgrades provides a silver lining for Apple’s average sales price.
In the September 2023 quarter, about 44% of iPhone purchasers chose to upgrade from the base storage model, aligning with historical trends and marking a recovery from the dip in 2023. The preference for higher storage models comes despite the earlier popularity of basic models, which have lower storage capacities and prices, in a new report from Consumer Intelligence Research Partners (CIRP).
The shift in storage preferences reflects changes in consumer behavior. Initially, the need for more storage was driven by the growing size of operating systems, app libraries, and media collections.
In the past, the rise of iCloud storage and streaming media such as Apple Music had temporarily lessened the demand for higher onboard storage. But users are increasingly seeking to “future-proof” their devices against evolving tech needs, with considerations for longer purchase contracts and extended usage periods.
In 2023, analysts observed a 2% year-over-year reduction in iPhone revenue. As a result, they believe that weak iPhone sales over the holidays will have an impact on Apple’s first fiscal quarter in 2024.
