iPhone demand has been lower than expected which has pushed Apple’s valuation below Microsoft since the start of 2024. The company is seeing underwhelming demand for the iPhone 15 series and analysts have pointed to lower grades for the company and its shares.
But the interesting news is that Apple might not be overly worried about these reports and that’s because the company is seeing a major shift in the buying trends of the iPhone users.
People buying iPhones with higher storage variants means they are spending more on the new iPhones, which directly makes a big positive mark to the average selling price of iPhones for the company’s business data.
Now, the change in buying patterns are being attributed to a longer shelf life of one iPhone, which is now being used for more than 3 years, which wasn’t the case a few years back. You could say that people don’t want to spend $1000+ on a new iPhone after every 12 months, and the incremental upgrades tend to help with making this decision. The other important change is the use case of the iPhone, which is now part of the package where you can work, have fun and do more.
So if you record a lot of 4K videos, the storage requirements shoot up because of the large file sizes. For the longest time, people have preferred to pay for iCloud but the need to future-proof a device comes with the demand for a higher storage iPhone.
But as we have seen with Apple, the business thrives even when the market goes silent. If the company can continue to get enough demand to stretch its sales numbers, the revenue projections will automatically shoot up thanks to the cost of owning the iPhone which hasn’t been a deal breaker, at least for those in the Apple ecosystem. And for all we know, the next quarter results show the impact of these premium iPhone purchases, keeping Tim Cook and Co. happy for one more year.
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