Apple Inc. reported a drop in the average selling prices of its products in the latest quarter. On a conference call, an analyst asked Chief Financial Officer Peter Oppenheimer to explain the reasons.

QUESTION: The average selling prices for the iPad and the iPhone seem to have declined. Is that a function of the availability of cheaper models or is Apple just testing different prices as it expands into emerging markets?

RESPONSE: We don't talk about iPhone and iPad (average selling prices) but I would like to give you a little bit of color on this quarter. ... Beginning with the iPhone, the (average selling price) was down due to a higher mix of lower-priced models and a stronger U.S. dollar. And that was the case generally on a sequential and a year-over-year basis. Regarding the mix, we believe this was largely driven by all the new product rumors and economic conditions, particularly in Europe.

For the iPad, it was down more year-over-year than it was sequentially. The year-over-year decrease was really attributable to four things: We had a higher mix of lower-priced models; we reduced the price of the iPad 2 to $399; with our expanded distribution we had a higher mix of indirect sales this year than we did a year ago; and the dollar impacted us as well.


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