To stimulate significant growth in iPhone sales? All four models need to be sold out!

Since 2020, Apple has released four iPhone models each year, as the company found that expanding its product line often drives strong growth in iPhone sales. In September of this year, the company launched the iPhone 16, iPhone 16 Plus, iPhone 16 Pro, and iPhone 16 Pro Max.

However, not every iPhone is equally popular. Data shows that since 2020, each year there has been one new iPhone model that underperforms compared to others. This year's underperformer is the iPhone 16 Plus, which is positioned in the middle of the product line. Priced at $899 in the U.S., it is more expensive than the base model iPhone 16 but cheaper than the higher-end iPhone 16 Pro and Pro Max.

Data indicates that total iPhone sales for fiscal year 2024 are projected to be $20.118 billion, showing almost no growth since 2022. Analysts believe that if Apple can achieve growth across all four new models without causing internal competition, it will provide the best opportunity for the company to significantly increase iPhone sales since 2022.

The Plus Version Continues to Drag Behind

Apple does not disclose sales data for each product individually. However, research firm DSCC, which focuses on the smartphone display industry, analyzed data from the display panel supply chain and found that the market share of iPhone Pro and Pro Max models has been increasing year by year, while the market share of the Plus model has dropped from 21% of Apple's total screen orders in 2022 to 10% in 2023. Although it has rebounded to 16% this year, according to DSCC, it still has the lowest sales among Apple's new iPhones.

Other data also shows that Plus sales are underperforming. According to survey data from Consumer Intelligence Research Partners, the iPhone 16 Plus accounted for 4% of total iPhone sales in the U.S. in the third quarter, while the Pro and Pro Max each accounted for 6%. The regular iPhone 16 also accounted for 4%. This metric only includes sales data from the weeks following the release of the latest models in the third quarter, but the data for 2024 is consistent with last year's figures, where the sales share of the iPhone 15 Plus one month after its release was 3%.

In Counterpoint's data, the best-selling single smartphone models globally in the third quarter of 2024 were the iPhone 15, iPhone 15 Pro, and iPhone 15 Pro Max, while the Plus model did not make the top ten.

The Failures of Mini and Plus

When the iPhone was first released in 2007, there was only one new model each year. By 2014, Apple launched the iPhone 6 Plus, offering two sizes for the first time, which brought over 27% growth for three consecutive quarters in 2015. In 2017, Apple released the iPhone X, raising the price of high-end models and creating a three-model lineup, resulting in the company achieving over 15% growth for three consecutive quarters In 2020, Apple shifted to a four-model lineup, adding the iPhone Mini, which was the lowest-priced new iPhone at the time, priced at $699. The four-model lineup led to a 54% surge in iPhone sales, partly due to pandemic-driven growth. However, since then, iPhone sales have remained relatively flat. Apple maintained this strategy in 2021, hoping to attract consumers who were accustomed to smaller-screen phones. But this strategy did not work, and Apple no longer sells devices with a 5.4-inch screen.

By 2022, Apple changed its strategy, launching the iPhone 14 Plus, equipped with the same chip and features as the entry-level iPhone 14 but with a larger screen. This strategy was similar to Apple's successful experience in 2014. During that sales cycle, Apple increased the screen procurement for the iPhone 14 Plus, accounting for 21% of total orders.

However, the Plus strategy was not as successful as before.

Replacing Plus with Air?

Looking ahead, the media expects Apple to continue with the four iPhone strategy but may modify the fourth model in the product line by 2025. For example, Apple may no longer offer the low-end Mini model or the mid-range Plus model, but instead introduce an Air model at the high end. According to a Bloomberg report from August, the Air model may feature lighter devices and a higher starting price.

Despite the higher price, Apple may make some compromises on the Air device, such as equipping it with only one camera to maintain a lightweight and slim design. The current high-end models, Pro and Pro Max, come with three cameras to enhance photography capabilities but also add weight. Ross Young, founder of DSCC, stated that he expects the Air's screen size to be 6.55 inches, falling between this year's Pro and Pro Max.

For Apple, launching a new high-end phone may make sense. In recent years, the Max models have outperformed low-end models in sales, indicating that consumers have a stronger demand for high-performance and feature-rich high-end phones than for lower-priced models in Apple's product line.

In October this year, Apple stated that the company has sufficient inventory to meet the demand for the iPhone 16 and iPhone 16 Plus, but the more expensive Pro and Pro Max models remain in short supply.

In markets outside the U.S., Apple's more expensive models have shown more growth in recent years. In China, during the first three weeks of the iPhone 16's launch, sales of the 16 Pro and Pro Max increased by 44% compared to last year's high-end models.

Analysts believe that for Apple, shifting from Plus to Air could mean more iPhone sales, especially if the new model is priced higher than other iPhones, which would help Apple expand its profit margins and continue the trend of rising average selling prices. Additionally, this could help Apple focus fans' attention on a single high-end iPhone model