Three (or Four) iPhones Would be Just Fine
We recently observed that market share for the newest, most expensive iPhone Pro and Pro Max models has plateaued, at a relatively high level. Demand for those super-premium phones seems to decline towards the end of their one-year market cycles, which creates some downward pressure on the average selling price of iPhones in the US.
The formerly flagship iPhone “number” base models - 15, 14, 13, etc. - combined drive more unit sales in the US. Apple offers each of these phones for three years, with the price going down annually as newer models are introduced. These standard models remain the heart of Apple’s iPhone business.
In the past two years, the standard models have been flanked by larger Plus variants, and before that smaller mini variants, and also the low-priced SE. The mini was a short-lived experiment, and Apple discontinued it after three years of negligible sales. Similarly, we are not sure the Plus is earning its place in the lineup. The iPhone SE is now in its third generation. The first version was on the market for four long years before updating. The most recent version came two years after that and is now well into its second year.
Grouping phone sales by model type suggests that the pendulum swing from the original, single iPhone model in 2007 to the current lineup of eight individual models (not counting storage variations!) has gone a little too far. The base models accounted for 42% of US unit sales in the 12 months ending in September 2023, while iPhone SE accounted for 5% of unit sales in that time period (Chart 1).