A series of iPhone 16s on display contained in the Apple store at Tun Razak Exchange in Kuala Lumpur, Malaysia, on Sept. 20, 2024.
Annice Lyn | Getty Images News | Getty Images
Certainly one of the primary things Steve Jobs did when he returned to Apple in 1997 was simplify Apple’s product lineup. On the time that meant 4 computers: Two laptops and two desktops, each in a professional and consumer version.Â
“If we had 4 great products, that is all we’d like,” Jobs said at a product launch in 1998.
Three a long time later, Apple’s product lineup is way broader. The corporate in 2024 launched 4 iPads, 4 MacBooks, two desktop Macs, one Vision Pro headset, two Apple Watch models and three sorts of AirPods. But relating to iPhones, 4 stays the magic number.Â
That is what number of iPhones the corporate has released annually since 2020, and in September, it released the iPhone 16, the iPhone 16 Plus, the iPhone 16 Pro and the iPhone 16 Pro Max.
Apple introduced the four-phone lineup because historically the corporate’s iPhone sales have seen the strongest growth when it expanded the lineup. If Apple can show growth from the 4 recent phones it releases annually without them cannibalizing each other, that offers the corporate its best likelihood to see iPhone sales grow meaningfully for the primary time since 2022.
The corporate doesn’t give sales figures for its individual products, and overall iPhone sales for fiscal 2024 got here in at $201.18 billion. That is relatively flat going back to 2022.Â
Unfortunately for Jobs’ company, not the entire iPhones are equally popular.Â
Every yr since 2020, one among the brand new iPhone models has lagged its siblings in sales. This yr it is the iPhone 16 Plus, which lands in the course of the lineup. At $899 within the U.S., it’s dearer than the baseline iPhone 16 but cheaper than the iPhone 16 Pro and Pro Max, which have higher screens.
DSCC, a research firm focused on the smartphone display industry with estimates derived from the panel supply chain, has picked up on this trend. The shares of the Pro and Pro Max phones have been rising on an annual basis while the Plus model declined from about 21% of total Apple screen orders in 2022 to 10% in 2023, in accordance with DSCC’s data for annual panel procurement through October. While it recovered somewhat to 16% this yr, it’s still the bottom volume out of the corporate’s recent iPhones, in accordance with DSCC.
“They’re still really scuffling with this fourth model,” DSCC founder Ross Young said.
Other data shows the Plus lagging, too. The iPhone 16 Plus accounted for 4% of overall iPhone sales within the U.S. within the third quarter while each the Pro and Pro Max each accounted for six% of sales, in accordance with survey findings by Consumer Intelligence Research Partners. The regular 16 accounted for 4%, too, although early cycle iPhone sales are heavily weighted toward early adopters and the Pro models, in accordance with CIRP.
The metric only includes a couple of weeks of the newest model sales within the third quarter, however the 2024 findings are in step with last yr’s, where the 15 Plus accounted for 3% of total sales a couple of month after launch.
Apple’s iPhone 15, iPhone 15 Pro and iPhone 15 Pro Max took the highest three spots, respectively, in Counterpoint’s data for the best-selling individual smartphone models around the globe within the third quarter of 2024. The Plus model didn’t make the highest 10 list.
The Mini and Plus failures
When the iPhone was introduced in 2007 there was one recent model per yr. The lineup has expanded quite a bit since then, while Apple keeps older models on store shelves as budget options.
In 2014, Apple introduced the iPhone 6 Plus, the primary time iPhone got here in two sizes, which led to a few straight quarters of growth of over 27% in 2015. After Apple released the iPhone X in 2017, raising the value of the highest-end phone and making a three-model lineup, the corporate saw three straight quarters of growth of greater than 15%.
After Apple moved to a four-phone lineup in 2020, growth surged, hitting 54% in a single quarter, although that was partially boosted by the pandemic. But since then, iPhone sales have been mainly flat.
When the corporate introduced the iPhone Mini in 2020, it was the lowest-cost recent iPhone on the time, at $699.Â
Apple kept the identical strategy in place in 2021, hoping that the vocal minority of consumers that had previously demanded smaller phones would flock to the device. It didn’t work, and Apple not sells a tool with a 5.4-inch screen.
By 2022, Apple shifted its approach and introduced the iPhone 14 Plus, which had the identical chip and features as the corporate’s entry level iPhone 14 but a bigger screen. That mirrored Apple’s successful strategy from 2014. Apple boosted its panel procurement for the iPhone 14 Plus as much as 21% of the whole screens it ordered that cycle, in accordance with DSCC.
However the Plus strategy didn’t work in addition to it had before.Â
Is Air next?
Looking ahead, Apple is keeping its 4 iPhones strategy in place, however it may change the approach it takes to finding a successful fourth model for its 2025 lineup.
As an alternative of a fourth Mini model on the low end of the lineup or a Plus in the center, Apple may introduce an Air model at the highest of the lineup. An Air offering might be distinguished by a lighter-weight device and a better starting price, in accordance with an August report by Bloomberg News.
Despite giving it a better price tag, Apple can have to make a trade-off on the Air device by limiting it to 1 camera, on account of the lighter weight and a slimmer design. Apple’s current high-end phones, the Pro and Pro Max, have three big cameras that add photographic capabilities but additionally add weight. DSCC’s Young said he expects the screen size of the Air to are available at 6.55 inches, between this yr’s Pro and Pro Max sizes.
A recent high-end phone could make sense for Apple. Lately, the Max models have outperformed the lower-end models in sales, suggesting there’s stronger demand for more powerful and feature-packed phones at the highest of Apple’s lineup than there’s for lower-cost models.
In October, Apple signaled that the corporate had enough stock of the iPhone 16 and iPhone 16 Plus to fulfill demand but that the dearer Pro and Pro Max were still in brief supply.
Outside the U.S., Apple’s dearer models have shown more growth lately. In the primary three weeks of iPhone 16 sales in China, the 16 Pro and Pro Max models were up 44% compared with last yr’s high-end models.
Model preferences also vary across regions, Counterpoint analyst Varun Mishra told CNBC.
“In China, the Pro series is performing well, as consumers there are inclined to favour the Pro models,” Mishra said in an email. “In India, the Pro series is powerful, partly on account of a lower launch price in comparison with last yr, due to local manufacturing.”
Apple has previously released thinner, lighter models of its existing products with a purpose to raise prices and push the bounds of its engineering. In 2008, Apple introduced the MacBook Air, which it marketed by saying that it was thin enough to slot in an envelope. At first, it was dearer than Apple’s other Macs, starting at $1,799, but through the years, MacBook Air has grow to be Apple’s entry-level laptop.
In 2013, the corporate did the identical thing with its iPad, introducing an iPad Air, with a thinner design, even though it was Apple’s flagship recent iPad model released that yr. Apple now uses the iPad Air as the center option in its iPad lineup.
For Apple, a shift from Plus to Air could mean more iPhone sales, especially if the brand new model is priced higher than the opposite iPhones, which could help Apple expand its margin and proceed the recent trend of a better average iPhone selling price. It could also help focus Apple’s early adopters and fans on one single high-end iPhone model.
“Next yr they are going to try something different,” Young said.
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