Streamlining Success: Apple’s Quest for the Perfect iPhone Lineup
When Steve Jobs returned to Apple in 1997, he simplified the company’s product lineup to just four computers. This strategy proved effective, and Apple has since expanded its product offerings. However, when it comes to iPhones, the company has stuck to a four-model lineup since 2020.
The Four-Model Strategy
Apple releases four new iPhones every year, hoping to show growth without cannibalizing sales from each other. This approach has historically led to strong iPhone sales growth. Despite this, not all iPhones are equally popular. Every year, one model lags behind its siblings in sales. Currently, the iPhone 16 Plus is the least popular, accounting for only 4% of overall iPhone sales in the U.S. in the third quarter.
The Rise and Fall of the Plus Model
The iPhone 16 Plus is more expensive than the baseline iPhone 16 but cheaper than the iPhone 16 Pro and Pro Max, which have better screens. Research firm DSCC estimates that the Plus model’s share of total Apple screen orders has declined from 21% in 2022 to 10% in 2023. While it recovered somewhat to 16% this year, it remains the lowest volume out of the company’s new iPhones.
Shifting Strategies
Apple may change its approach to finding a successful fourth model for its 2025 lineup. Instead of a fourth Mini model at the low end or a Plus in the middle, Apple may introduce an Air model at the top of the lineup. An Air offering could be distinguished by a lighter-weight device and a higher starting price. This new high-end phone could make sense for Apple, as the Max models have outperformed lower-end models in sales, suggesting stronger demand for more powerful and feature-packed phones.
Regional Variations
Model preferences vary across regions. In China, the Pro series is performing well, as consumers tend to favor the Pro models. In India, the Pro series is strong, partly due to a lower launch price compared to last year, thanks to local manufacturing. Apple may need to tailor its strategy to regional preferences to maximize sales.
Lessons from the Past
Apple has previously released thinner, lighter models of its existing products to raise prices and push the limits of its engineering. The MacBook Air and iPad Air are examples of this approach. If Apple shifts from Plus to Air, it could mean more iPhone sales, especially if the new model is priced higher than the other iPhones, which could help Apple expand its margin and continue the recent trend of a higher average iPhone selling price.
The Future of iPhones
As Apple looks ahead, it may need to adapt its strategy to focus on a single high-end iPhone model that appeals to early adopters and fans. With the iPhone 16 upgrade cycle expected to be a multiyear process, Apple has time to experiment and find the perfect balance for its iPhone lineup. Will the Air model be the key to unlocking stronger iPhone sales growth? Only time will tell.
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