Here’s why Apple may not be overly concerned about declining iPhone demand
iPhone demand has been lower than expected, pushing Apple’s value below Microsoft’s since early 2024. The company sees weak demand for the iPhone 15 series, and analysts have indicated lower ratings for the company and its stock.
But the interesting news is that Apple might not be too worried about these reports, and that’s because the company is seeing a big change in the purchasing trends of iPhone users.
People buying iPhones with more storage means they spend more on new iPhones, which directly makes a big positive impact on the average selling price of an iPhone in the company’s business data.
Now, the change in buying habits is attributed to the longer shelf life of one iPhone, which has now been used for more than 3 years, which was not the case a few years ago. Arguably, people don’t want to spend more than $1,000 on a new iPhone every 12 months, and incremental upgrades usually help with that decision. Another major change is the iPhone operating case, which is now part of a package where you can work, have fun and do more.
So if you record a lot of 4K videos, the storage requirements will increase due to the large file sizes. For the longest time, people have wanted to pay for iCloud, but the need to secure the device for the future will require an iPhone with a larger storage space.
But as we’ve seen with Apple, business is booming even when the market is quiet. If the company continues to get enough demand to grow its sales numbers, revenue projections will automatically rise thanks to the cost of owning an iPhone, which hasn’t been a deal breaker, at least in Apple’s ecosystem. And for all we know, next quarter’s results will show the impact of those premium iPhone purchases, keeping Tim Cook and Co. happy for another year.
