Average selling price (ASP) is a crucial indication for gauging how well Apple's (NASDAQ:AAPL) business is performing. After all, the iDevice maker has somehow found a niche charging a premium price for a product that is basically a commodity these days.

In this video segment, The Motley Fool's Dylan Lewis and Sean O'Reilly explore why ASP is so important for understanding Apple and its business. They also discuss how that metric has developed lately.

Listen to the full podcast by clicking here. A transcript follows the video.


Sean O'Reilly: Talk to me about revenue for phones, and all that.

Dylan Lewis: People love looking at this ASP number. The easy way to juice revenue, given that 70% of their revenue comes from iPhone sales, is for them to sell more iPhones, or to sell them at a higher price point. ASPs for the quarter were $670, which was up $67 year over year.

O'Reilly: It is always staggering to me how they're able to charge a premium product for something that is so stinking commoditized on planet Earth. It's staggering. They've been able to maintain this phone. It actually doesn't have a faster processor than the Android, but here, have one.

Lewis: If you're thinking about it from a philosophical standpoint, it's like you're using the phone as an access point to your messaging and the Web. So their ecosystem is that sticky; people love it. I guess they've nailed product design and user interface so well that they're able to command that high price point.

Dylan Lewis has no position in any stocks mentioned. Sean O'Reilly has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.