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5 Issues that Ate into Apple & Reduced Sweetness in 2Q

ASP No Longer USP for iPhone
ASP No Longer USP for iPhone

Ø In Q2, net sales of iPhone fell 18 percent to $32.86 billion on the back of a 16 percent drop in unit sales. The bigger than expected decline in revenues is also reflective of a drop in ASP (average selling price) to $642 from $659 in the year-ago quarter, representing a percentage decline of 2.5. Sequentially, the drop was an even more stark 7 percent.

Ø The company’s explanation- Change in the mix of iPhones and the dollar strength. Plausible reason!

Ø Analysts see the product mix shifting more towards low-end iPhone 5s and iPhone SE, opening up the possibility of a further fall in ASP.