UBS Reports Surge in Demand for Base iPhone 17 is Impacting Apple’s Average Selling Price (ASP)

The notion that excess can be detrimental is particularly relevant in the tech industry, and Apple is currently navigating this reality, primarily due to the soaring demand for its base iPhone 17 model.

In recent days, we have been closely monitoring the demand trends for varying iPhone 17 models, utilizing shipping times as a metric across numerous regions. The prevailing consensus indicates that the base variant is experiencing unprecedented demand relative to its counterparts.

Bank of America analyst Wamsi Mohan emphasized this point in a recent investment note, where he observed that the current shipping time for the iPhone 17 has increased to 18 days, compared to just 10 days for the iPhone 16 last year. He noted that this trend is particularly pronounced in China, driven by two significant factors: a 15% government subsidy for electronics applicable to the base iPhone 17 model and a temporary unavailability of the iPhone Air as carriers await regulatory approval.

This pattern is quite logical when considered alongside the enhanced features of the iPhone 17’s base variant, which now incorporates several Pro-level functionalities:

A stunning 120Hz ProMotion display that features a dynamic refresh rate, optimizing battery life.
An upgraded 48-megapixel ultrawide camera lens, compared to the previous 12-megapixel lens on the iPhone 16.
A new 48-megapixel main camera capable of delivering 2x optical-quality zoom.
An 18-megapixel front-facing camera, upgraded from the 12-megapixel version on the iPhone 16.
Expanded base storage, now starting at 256GB.
The retained retail price of $799, identical to that of the iPhone 16’s base model.

Insights from UBS Analyst David Vogt

In a recent investment note, UBS analyst David Vogt provided valuable insights based on their Evidence Lab data:

The lead time data suggests “elevated” demand for the base iPhone 17, contrasted with “relatively muted” interest in the other three variants.
Reports indicate that Apple suppliers are ramping up production of the base model, though significant adjustments to production plans usually commence in November.
Outside of China, wait times for the Pro and Pro Max models remain relatively stable year-on-year, while demand for the Air model has diminished compared to the iPhone 16 Plus.
This generation of iPhone Air and Pro models has seen price increases, whereas the base iPhone 17 effectively offers a perceived price cut due to higher base storage.
When factoring in these pricing dynamics against the burgeoning demand for the base model, Apple’s Average Selling Price (ASP) “upside” appears constrained.

As a result, Apple may find itself facing challenges linked to its own success with the base iPhone 17 model. What are your thoughts on this situation? We encourage you to share your opinions in the comments section below.

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