Selected Clear AllResearch Type - Press Releases Research by Market - Mobile & Telecom Category - Semiconductor Components Analyst - Steven Mather
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Apple Takes Value-Added Approach to Cultivate iPhone DemandJune 08, 2010With its highly successful iPhone line, Apple Inc. has clearly illustrated two contrasting approaches to generating growth in sales of hardware by mobile handset OEMs.
On one hand, Apple has been very successful in maintaining the Average Selling Price (ASP) of its latest flagship handset offering by effectively implementing enhanced features. The attractiveness of these enhanced hardware and software features is key to stimulating sales of the latest handset while maintaining consistent pricing over time. Meanwhile, when a new model is introduced, the price of the previous handset in the line is reduced and thus offers a lower price point to attract more cost-conscious buyers. This is enabled by the component price erosion that allows this price reduction.
Apple Rides High-Margin Hardware to Competitive SupremacyJune 07, 2010Apple Inc. has become the world’s most valuable technology company based on sales of high-margin hardware like the iPhone, an approach that competitors are finding difficult to duplicate, according to iSuppli Corp.
“Apple’s introduction of its latest iPhone today perfectly illustrates the company’s route to corporate dominance: generating huge profit by selling high-margin, high-value-added hardware, with the iPhone’s Average Selling Price at a whopping $600,” said Steve Mather, principal analyst, wireless, for iSuppli. “The company makes the majority of its profit on sales of hardware. This approach defies the often-cited route to success used by many technology companies of selling hardware at low margins and cashing in on revenue generated by high-profit software.”