The Average Selling Price Of iPads Nosedived

Apple released earnings yesterday and, as expected, the average selling price of iPads declined steeply in the fourth quarter, which saw the release of the new iPad Mini.

Here are the headline figures from Apple earnings, courtesy of SAI. The results are compared with investor expectations tabulated by Piper Jaffray analyst Gene Munster:

  • The iPhone sold 47.8 million units versus 50 million expected
  • iPad sold 22.9 million versus 23 million expected
  • Macs sold 4.1 million versus 5 million expected

Meanwhile, the iPad’s average selling price or ASP dropped to $467, a 13 per cent decline from the quarter prior. The ASP is off 29 per cent from the second quarter of 2011, when the iPad 2 was released. 

The drop in ASP is the result of the iPad Mini, released Nov. 2. The Mini is substantially cheaper than its full-sized counterpart. We believe this was a necessary price strategy, lest Apple miss out on the burgeoning mini-tablet market. However, the ASP was already falling before the release of the Mini, indicating that competitive pressures in the tablet market were already heating up. 

As we we outline in our report on tablet ownership, mini-tablets and falling prices are going to drive tablet sales growth in the next few years. Look for tablet penetration to jump globally thanks to cheaper tablets across the board. 

iPad ASP

By contrast, the ASP of the iPhone has been remarkably steady over the years, even as the overall price of smartphones has come down.

iphone asp

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