Apple to Rake in $3B Profit in 2015 Thanks to 16GB iPhone 6, 6 Plus – Analyst
Apple looks to a minimum windfall of $3 billion in 2015 and the tech giant can credit its decision to sell the basic iPhone 6 and iPhone 6 Plus models in 16GB storage configuration.
The claustrophobic 2014 iPhone variants were somewhat unpopular to many Apple fans but according to Above Avalon analyst Neil Cybart, that exactly was the company's intention - for consumers to seriously consider the mid-tier model, the 64GB, and pick it instead.
That would mean additional $100 per unit sale and by 2015, it translates to around $3 billion in revenues for Apple, Cybart estimated, according to a report by Business Insider.
"By not doubling the entry-level storage tier to 32GB, I estimate Apple will save $3 billion of profit in 2015," the analyst said on his recent report.
Simple genius
As pointed out by Business Insider, the 16GB iPhone 6 and 6 Plus have become problematic for users - from upgrading to the latest iOS version that at most times require higher disk space to the normal everyday usage.
"Having a 16GB iPhone can limit what you can do on your phone, even something as simple as checking Facebook," the same report noted.
So why the 16GB decision when clearly it will bring inconvenience to users and dampen the overall iPhone experience?
It's all about business, Cybart offered.
"I suspect Apple's bigger concern was the long-term balance between customer's storages needs and maintaining the iPhone's aspirational brand," the market expert said.
Near-term, iPhone buyers not satisfied with the 16GB model are likely to move up and grab the 64GB option instead, thus ending up paying $100 more.
For the long-term, Apple is also playing some sort of conditioning game - the tech giant is betting on the likelihood that more consumers would prefer the mid-tier models and the trend would continue on with the succeeding iPhone refreshes.
To keep them scooping up
So by the time the 32GB model becomes the basic model for the next iPhone release date, which Cybart said is inevitable and could happen as early as next yet, most users are already hooked to the 64GB and are willing to pay up the extra dollar for the added premium.
Cybart is forecasting that the 64GB model will develop into the most popular variant for Apple fans, especially for the long-time users, while the 32GB could serve as the initial choice for switchers that moistly will come from the Android universe.
It is safe to assume then that in time for the iPhone 7 release date, rumoured for the second half of 2015, the bestsellers would be the 32GB and 64GB configurations, again leading Apple to surpass its previous sales performance.