Storage Upgrades - iPhones Not-So-Secret Revenue Weapon - Decline for the First Time

We saw in the June 2023 quarter how iPhone selling prices declined in an unusual way.  Apple’s recent earnings announcement may have reflected that, in relatively lower iPhone revenues. Last week, we looked at how model mix might have contributed to the pressure on the average selling price. Here, we look at storage upgrades.

We have long tracked how iPhone buyers’ spending is propelled by upgrades from base storage. For legacy and SE iPhone models, base storage is 64 GB, and for the newer models it is 128 GB. Each model offers two or three upgrades in storage capacity, with each upgrade priced at $100 or $200. The highest storage capacity iPhone Pro models cost $500 more than the base, which equates to a 50% premium for the standard sized iPhone 14 Pro. 

In prior quarters, the majority of buyers of most models opted for and paid the price for upgraded storage. This trend reversed in June 2023, when only about one-third of buyers upgraded storage (Chart 1).