Apple, a company synonymous with innovation and market dominance, finds itself grappling with an unexpected challenge: the persistent underperformance of one of its four iPhone models. While the iPhone 16, 16 Pro, and 16 Pro Max have seen robust sales, the iPhone 16 Plus, sandwiched in the middle of the price range, is significantly lagging. This challenges Apple’s seemingly successful “four-model” strategy, raising questions about its future approach to product diversification and the ever-evolving demands of the smartphone market. This article delves into the data, analyzes the historical context, and explores Apple’s potential strategies for addressing this persistent sales puzzle.
Key Takeaways: Apple’s iPhone 16 Lineup and the “Plus” Problem
- The iPhone 16 Plus is significantly underperforming compared to its siblings, mirroring a trend observed since Apple adopted the four-model strategy.
- Data from DSCC and CIRP confirms the iPhone 16 Plus’s low market share, with sales considerably lower than the iPhone 16, 16 Pro, and 16 Pro Max.
- Apple’s past experiences with the iPhone Mini and the initial success with the Plus model in 2014 highlight the difficulty in balancing price points and features to appeal to a broad consumer base.
- Bloomberg reports suggest Apple might replace the Plus model with an “Air” model for the iPhone 17 lineup, focusing on a lighter, potentially single-camera device at a higher price point.
- Regional variations in consumer preferences further complicate Apple’s product strategy, emphasizing the need for a nuanced approach that considers diverse market dynamics.
The “Plus” Model’s Consistent Underperformance
Since 2020, Apple has maintained a four-iPhone lineup strategy, releasing a standard model, a Plus model, and two Pro models (Pro and Pro Max). While this strategy initially fueled impressive sales growth, partly due to the pandemic-driven market surge, it has recently hit a snag. The consistent underperformance of the Plus model – this year the iPhone 16 Plus – casts doubt on the long-term viability of this approach.
Data and Analysis
Research firm DSCC, focusing on smartphone display supply chains, reveals a concerning trend. The share of Plus models in Apple’s total screen orders has consistently declined. While initially reaching 21% in 2022, it plummeted to 10% in 2023, recovering only slightly to 16% in 2024. This paints a clear picture of the Plus model’s struggle to gain traction compared to its higher-priced and more feature-rich Pro counterparts. “They’re still really struggling with this fourth model,” stated DSCC founder Ross Young.
Consumer Intelligence Research Partners (CIRP) provides further evidence. Their survey of U.S. iPhone sales in the third quarter of 2024 shows that the iPhone 16 Plus accounted for only 4% of overall sales, significantly lower than both the Pro and Pro Max models, which each captured 6% each. The regular iPhone 16 also held a 4% market share. While acknowledging that early sales tend to favor Pro models and early adopters, this data nevertheless reinforces the Plus model’s underwhelming performance – a trend consistent with the iPhone 15 Plus’s market share in 2023.
Counterpoint’s global best-selling smartphone rankings for Q3 2024 further highlight the Plus model’s struggles. The iPhone 16 Plus failed to even make the top 10 list, overshadowed by the iPhone 15 (overall sales across all years), 15 Pro, and 15 Pro Max, which dominated the rankings. This demonstrates the model’s lack of international appeal.
A Look Back: Past iPhone Lineup Strategies and Their Outcomes
To understand Apple’s current predicament, it’s crucial to examine its past product lineup strategies. Initially, Apple focused on simpler lineups. However, the introduction of the iPhone 6 Plus in 2014, offering a larger screen size, resulted in three consecutive quarters of over 27% growth in 2015. Similarly, the launch of the iPhone X in 2017, with its premium price and features, fueled three quarters of growth exceeding 15%.
The shift towards a four-phone lineup in 2020, initially saw a surge in growth (hitting 54% at one point, albeit partly due to pandemic-related factors). But the subsequent sales numbers have largely plateaued. This reveals a critical flaw in solely relying on product expansion to fuel sustained growth.
The attempt to introduce the iPhone Mini in 2020 and 2021—targeting a niche market for smaller phones—failed spectacularly. Apple’s subsequent shift to the Plus model (mirroring the 2014 strategy) also proved less successful than anticipated, as the data clearly shows. This underscores the difficulty in effectively catering to a broad range of preferences and price sensitivities.
Apple’s Potential Next Move: The “Air” Model
Looking ahead, Apple is reportedly planning a change for its 2025 iPhone lineup. Rather than clinging to the underperforming Plus model, Bloomberg News suggests that Apple is considering an “Air” variant. This model might be distinguished by its lightweight design and a higher starting price. The trade-off, according to DSCC’s Young, potentially involves reducing the camera count. Specifically, reports speculate a 6.55-inch screen size for the “Air,” positioned between the current Pro and Pro Max sizes.
A Strategic Shift?
This strategic shift makes sense in several ways. Recent years have seen the Max models consistently outperform their lower-end counterparts, which denotes higher demand for premium, feature-rich phones. Apple’s own inventory reports reinforce this: in October, they indicated ample stock of iPhone 16 and 16 Plus models, while the more expensive Pro and Pro Max versions remained in short supply. This strongly signals that higher-end devices capture significantly more market demand.
Moreover, this trend is particularly evident in international markets. Notably, early sales data from China shows a 44% increase in sales of iPhone 16 Pro and Pro Max models compared to their 2023 predecessors. In India, local manufacturing has contributed to a lower launch price for the Pro models, leading to robust growth. This illustrates the growing importance of the higher-end market segments globally.
Apple’s past experience with the MacBook Air and iPad Air offers a precedent. Initially priced higher than their existing counterparts, these products eventually transitioned into entry-level and mid-range offerings due to their success. Thus, an “Air” iPhone could follow a similar trajectory. A focus on a single premium model might also help Apple curtail issues of cannibalization between higher-end phones, focusing marketing efforts on a single, premium target audience.
Ultimately, for Apple, transitioning from the Plus to the Air could pave the way for increased iPhone sales and stronger margins. The strategic shift towards a high-end focus reflects the evolving demand landscape. As Ross Young accurately predicted, Apple will indeed be trying something “different” with its next phone, attempting to optimize its product strategy for long-term success.
