Apple is betting big on the upcoming larger iPhone XS Plus to drive sales and profits. The Cupertino giant looks set to repeat the success it had with iPhone 6 and 6 Plus, the last time in iPhone’s history when all new models were released with larger screens. As per the rumour mill, Apple will be releasing 3 new iPhones this year, all of which will have larger displays. 6.1-inch screen for LCD based iPhone XC, 5.8-inch screed for OLED based iPhone XS and 6.5-inch screen for the larger OLED based iPhone XS Plus.
As per a report by Wall Street Journal, people are buying fewer phones and upgrade cycles have become longer. This means that devices have reached a point where they last longer and even cheaper phones have enough performance and value that people don’t feel the need to upgrade often. In such times, it is important for a company like Apple to go for different revenue generating measures to earn more per device.
The benefit of releasing iPhones with larger displays is two-fold for Apple. The first benefit is the increase in price, which results in increased revenue due to higher average selling price. The second benefit, as per Kantar Worldpanel, a research firm, is that users with larger devices tend to use their devices 62% more than average. Why is this so important for Apple?
The importance lies in services. Apple has been spending more on services, which include Apple Music, iCloud, Apple Pay and the upcoming video streaming service, which already has huge names, like Oprah, associated with it. Apple’s services revenue is now second to iPhone’s revenue for the company. It amounts for around $9.2 billion, which is more than Mac sales. To further grow this business, Apple needs users to spend more time using their devices.
Apple currently has 1.3 billion active iOS users and can be a major source of the company’s future revenue. Some analysts predicted that hardware sales have peaked but iPhone sales have been proving them wrong constantly. However, everybody knows that there would be a time when hardware sales will slow down and that’s when services would have to be the money maker for the Cupertino giant. For this reason, Apple is delivering new iPhones with larger displays, dual-SIM support and more.
Until then, expect Apple to continue increasing the average sales price of iPhones to generate more profit from each device sale.