IDC: Apple's high ASP more than double others, keeps it below 15 percent

IDC: Apple's high ASP more than double others, keeps it below 15 percent

Summary: Apple's iPhone is a fantastic device and it sells well in areas like North America where consumers can afford the high average selling price. Smartphone growth is slowing and long term forecasts are getting more reliable.


Forecasts for the smartphone industry used to add little value as things changed quickly, however over the last couple of years the market has settled down and the changes have not been drastic at all. IDC just issued their four year forecast that appears reasonable given the current state of affairs.

IDC report: Apple's high ASP more than double others, keeps it below 15 percent

We have seen significant growth in smartphone sales, but IDC forecasts that this growth will slow to single digits in North America by 2017. That makes sense given the saturation of smartphones with a reported 200 million smartphones in active use on this continent.

Android will continue its domination with worldwide share expected to stay in the upper 70 percent. iOS is predicted to stay pretty consistent at mid to upper 14 percent, likely due to their high ASP and fact that other smartphone platforms offer equally compelling experiences. Windows Phone is predicted to have the most growth from 3.9 percent to 7 percent by 2018 and IDC considered the new Windows Phone partners here too. BlackBerry is forecast to continue falling from 1 percent (2014) to 0.3 percent by 2018.


We know that Apple's iPhone is the most expensive smartphone available, but I was a bit shocked how its average selling price (ASP) is at least double, and in some cases almost triple, that of competing smartphone platforms. The iPhone leads in ASP at $649 in 2014 with BlackBerry at $339, Windows Phone at $265, and Android at $247. US consumers buy the iPhone thinking it is just $100 or $200 because they have bought into the subsidy model, but the real cost is much higher.</p

Related coverage

Topics: Mobility, Android, iPhone, BlackBerry, Smartphones, Windows Phone

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Considering those figures ...

    it's a little amazing that Apple sell as many ios units at they do.

    Do consumers in North America really have no idea what they're paying for in their two-year contracts?
    • Thats right

      Yes, Apple is price gouging north America, and the wireless carriers follow along.

      Some of the new AT&T plans will allow you to save money by using your own phone (bought from eBay for example), or you can rent a phone. We finally get to see the real prices. For example; a iPhone 4s is like $25 per month to rent. There are way faster, bigger, better phones to rent for cheaper.
      Sean Foley
      • more thing

        Having the non-subsidized price and rental price upfront is a bad thing for Apple. They can no hide their cost. Good thing for consumers. I suspect more people will transition to Android/WinPhone because options and prices are better.
        Sean Foley
        • Price difference..

          Do you think the price difference is that much when comparing premium phone to premium phone?

          Here's a example. 16 gig Samsung Galaxy S4

          Unlocked $514

          Unlocked iPhone

          Unlocked 579 dollars.

          Now I just quickly grabbed those.

          However I DO AGREE with what your saying. That when the prices get exposed more, then the pressure will force the phone companies to chip away at their margins. And considering apples margins are in the 20-30% range we could easily see a price decrease in the future.
          • Transparency

            Great eye-opening points in this discussion. It's kind of like health care, you can't control costs unless the consumer knows how much things really cost.
      • I challenge the faster, or even better..

        Bigger certainly. But the iPhone 5s holds its own with any android right now. Better would be a challenge especially if you throw the WAY in there. For the first time I'm seeing Android devices HW that is beginning to seem compelling to me. The Android OS has always been compelling, but its features always seemed ahead of what was under it. And the price difference drastically changes if you compare premium phone to premium phone. Where the ASP gets twisted with Android is the cheap disposable phones.
        • Challenge accepted

          Did you notice I said iPhone 4s? That's over 2 years old now and not even an LTE phone. AT&T is asking too much for it; for example the Galaxy S3, old phone too, is cheaper to rent and way better in every regard.
          Sean Foley
      • Yes, Apple is price gouging

        And do is BMW, Mercedese-Benz, Nike, Coca-Cola, Levi's, Bosch, Microsoft ....basically insert big name brand here as they all have cheaper what's you point.

        The biggest take I see from this chart which is a wild forecast at best is that if Apple does keep those numbers then they have a very rosy future coz they will most likely not drop their margins by much if at all BUT the OEMs that license their OSes such as Samsung, Sony, Heuwei, Motorola, Lenovo, LG, HTC...and so on....all have a rocky future co. Their only point of difference will be price and that's means a continual reduction in profits as they all keep having to undercut each other.
    • They probably do

      but it is a lot less painful spread out over a contract than it is in one big hit.
    • Wireless contracts are a rip off

      Most Americans sign up for at least a 2 year wireless contract and with that they get a subsidized phone. I have seen people at work who are paying more than 2x of what I am paying for the exact same service and plans only because they are subsided and I am on a pay as you go plan and buy my phone out right.

      But pay as you go plans are becoming more and more popular and coverage is getting better. At the same time Android phones are just as premium in hardware, the OS is now very stable, fast, and fluid, etc. Basically equilibrium has occurred while at the same time Android is getting cheaper each year with devices like the Nexus 5 being half the price.

      Apple, at this point, is really coasting on their brand name and ecosystem lock-in with customers. It will be interesting to see in the post Jobs era if they still have the mojo to pull off another cash cow product line or if the iPhone will shrink in sales like the iPod is doing today.
      Rann Xeroxx
  • Not sure about now, but

    In the past, AT&T charged the same for the monthly iPhone data plan whether the phone was paid for or not. Since they didn't give a discount on the monthly plan, it made sense for many to continue with the subsidy model. Besides, it seems like today, many people tend to keep the same phone for shorter durations, always looking for the next flagship. Subsidy model seems to work for them.
  • Remember.. Apple ROBS people on extra storage.

    And you can't add SD cards. So Android phones are cheaper, plus people buy the SD card on the side to add the needed space. Go ahead add an extra 45 dollars to the ASP for Android because someone is getting the money spent on 64GB MicroSD cards and if you only have 7GB of free space, you will be adding an SD card if you use the smartphone at all.

    Apple charges $200 extra dollars to go from 16GB to 64GB (really 9GB to 53 GB after iOS7 takes its space). That is already factored into the ASP, while Android storage isn't. So the difference is a bit skewed.
    • Where did you get the 53 GB number?

      I have a yet to be issued 64 Gig iphone right in front of me. Brand new and it's 57gig. Some of the data is lost in the stupid marketing 1024 byte vs 1000 byte. The rest is the OS.

      And yes I believe that Apple does rob us where 48 gig of Flash should at most be a 50 dollar difference.

      But I also get tired of people comparing MicroSD cards to built in flash.. They aren't even in the same ball park speed or reliability wise. Is it a factor.. yes. Can it be used yes. But it still needs to be considered that they are not the same.

      Also I just referenced ATT's page. The difference in price for a 16Gig vs 32 gig is 150 dollars. So it appears the cell phone companies love to just give it to us equally.
      • SD Cards

        On stock Android, you cannot install or run apps on your SD Card. What Android will use the SD Card by default is for application data (like loading 5 GBs of offline map data for your GPS app), backup data, and media data.

        The new Samsung S5 can use a 128GB SD card. You can place your whole music library and movies, etc on that for a fraction of the cost on an iOS device. And personally I have had a 64GB card that I have now used or about 4 different devices so reuse decreases the initial cost of the card.

        Its a flexibility that you simply do not even have the option for with iOS.
        Rann Xeroxx
  • its a simple return on effort issue

    Apple chooses its low (10-15% +/-) market share position because the return on greater effort is less. Where it is it can do what it wants ant the loyalists will follow. They don't support multiple versions for devices more than n yrs old because doing so costs more with less return.
    • Apple is also a single manufacturer

      The low market share is because there is only a single manufacturer of iOS devices. There are 2 separate areas to be analyzed here. How do Apple phones market share compare to the market share of Samsung phones or HTC phones? If we are talking in terms of ASP and margins, we should stick to comparing phone models, not operating systems.

      If we are talking in terms of other sources of revenue, like percentages on app sales or revenue generated from other aspects of a mobile OS ecosystem, then it makes sense to talk in terms of iOS versus Android. If margins on mobile phone sales end up driven down, then OS dominance is going to be more significant as even the iPhone could end up a commodity. While Apple has been able to maintain margins on laptops, how much revenue is their PC market share bringing them? Market share matters if they want to remain a top player.
  • Sure

    This and $3.95 will get you a really good cup of coffee.
  • Re-Calibration 2

    Mr. Miller: the iOS versus Android share only makes sense if one subscribes to the thought that there's a magic percentage at which development stops and network effects punish the folks below the Mendoza line.

    But the market is so huge that even 5% share represents many customers and lots of opportunity to make good money.

    I also suspect that Android and iOS will never feel deprived for developers. I also believe that — and I think the ASP speaks to this point — the demographics of Apple customers will be even more attractive to developers who want to get paid for value.

    And, we must note that over in the pc space, Apple never did better than 10% sales share and 7% install base share (though the percentages are quite a bit higher when one breaks down the numbers into key demographics), and development took place and continues.

    I daresay that the Nokia X also validates my point of view that the os doesn't matter when one looks at the entirety of mobile. It's Android of sorts, sure, but the users are led to Microsoft services. The services, side effects, and device purchase are the things that do matter.

    But, I understand, it's hard to figure that stuff out (other than the purchase numbers), which means the job of the journalist (or a analytical firm such as IDG) has entered a difficult phase. Though, as we get the IDG freebie, I assume their paid-for products has taken the sophistication up a notch or two.
  • I think the new phone "contracts" are going to change things

    T-Mobile started something big with their Uncarrier plan. AT&T just changed to a new "Uncarrier"-like plan that now is saving me over $60 a month. However, the difference is that I buy the phone out-right. So I actually have to decide whether I'm going to drop down $650-$750 for an iPhone for $400 for an Android or $300 for a Windows phone. Then consider that I'm buying 3 phones for the family and that means I'm dropping down around $1900-$2100 for 3 iPhones compared to as low as $290 for 3 Nokia 520s (admittedly a very low quality smart phone). That's a huge difference in money. I can see people seeing this and just saying "no way" for that price, no matter how much they like Apple.

    I was that way with the Macs back in the day. I could buy an awesome Mac or an average PC, and decided that the average PC was just good enough. Already Apple is way down in places where people buy the phone outright. Now its here in the USA. We'll see if they can keep that ASP high.
    A Gray