1 Way Apple Inc. Might Be Planning to Boost iPhone Average Selling Prices Further

By Ashraf EassaFool.com

Although the iPhone 6/6 Plus cycle helped Apple see tremendous iPhone unit growth, part of the massive iPhone revenue growth story was due to a shift up in product mix.

Recall that the company released both the iPhone 6/6 Plus with storage configurations of 16 GB/64 GB/128 GB, a nice change from the previous 16 GB/32 GB/64 GB configurations in prior years. This new set of storage tiers made it almost a "no brainer" to go for the 64 GB iPhones rather than the 16 GB models, as that extra $100 bought the user a lot of additional storage.

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Per a new rumor from MyDrivers (via AppleInsider), Apple may be doing something similar with the iPhone 7 generation of devices.

A totally new storage tierThe report claims that Apple will be adding a 256 GB storage tier to its iPhone 7 Plus offerings. This will reportedly come in addition to the standard 16/64/128 models. The implication, then, is that the 256 GB iPhone 7 will probably come priced $100 higher than the already quite pricey 128 GB model, or about $1049 without a contract.

Although this doesn't seem like it could have a material impact on the company's iPhone selling prices/bottom line, I think that such a model could appeal to several classes of buyers and its existence could be good for a noticeable bump in blended average iPhone selling prices.

Those that must have the bestThe iPhone is a premium product and there's little doubt in my mind that there are a number of iPhone customers who absolutely must have the best iPhone that's currently available for sale. Since 256 GB of storage is greater than 128 GB (and significantly so), such a model would easily appeal to those customers.

Additionally, if this storage tier is exclusive to the iPhone 7 Plus, then customers who would have potentially gone with a 128 GB iPhone 7 for $849 may feel compelled to step up to a 256 GB iPhone 7 Plus instead (netting Apple an additional $200 in revenue).

Customers who want to shoot a bunch of 4K videosWith the iPhone 6s/6s Plus, Apple introduced the ability to shoot 4K videos at 30 frames per second. Even at just 30 frames per second, 4K videos, by their very nature, take up significantly more space than either 1080p 30 frames per second or 1080p 60 frames per second video.

For customers who really enjoy shooting videos in 4K, having he extra storage space is likely to prove useful. Further, if Apple goes ahead and introduces 4K 60 frames per second recording in this year's iPhones (perhaps as a feature exclusive to the iPhone 7 Plus), then such videos would require even more space than current 4K 30 frames per second videos do.

Gamers, too One of the main draws of the iOS ecosystem, at least to this Fool, is that the platform is a very robust one for mobile gaming (both due to fantastic developer support as well as the very capable processors that Apple includes in its iOS devices).

Unsurprisingly, as mobile games become more visually rich, game sizes themselves have increased significantly. It's not uncommon to find games on iOS that take up about one gigabyte of space. For "power users" who enjoy higher-end mobile gaming (and also take a fair amount of videos/photos), more storage space would certainly be welcome.

Is this rumor legit?It's hard to tell if this rumor is accurate or not. Indeed, as Apple Insider's Daniel Dilger points out, MyDriver's track record isn't spotless. He also argues that keeping the 256 GB version exclusive to the larger iPhone 7 Plus would be an implicit signal from Apple that the Plus model is the "superior" device.

"Apple has never presented the Plus version as a superior device, and instead markets [the two iPhone models] as two options differentiated essentially only by size," Dilger writes.

The latter is a good point, but the iPhone "Plus" has been around for less than two years, so it's way too early to rule out a potential change in the company's strategy.

At any rate, I think this rumor makes sense and would not be at all surprised to see it proven true when Apple launches its next-generation flagships later this year.

The article 1 Way Apple Inc. Might Be Planning to Boost iPhone Average Selling Prices Further originally appeared on Fool.com.

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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