One of the things that we did not get right was the mix between the iPhone 7 and the iPhone 7 Plus," Apple Chief Executive Tim Cook told analysts on the company's earnings conference call on Tuesday, in response to a question about how supply of its top-end phone was constrained during the holiday shopping season.
"The demand was much stronger for the 7 Plus than we had predicted, and so it took us a little while to adjust all the way back through the supply chain and to bring iPhone 7 Plus into balance, which occurred this past quarter."
The popularity of the iPhone 7 Plus model represents a triumph for Apple with a new departure: packing a unique feature into its most expensive iPhone.
The iPhone 6 Plus differed from its smaller sibling only in screen size, but the 7 Plus model has a physically different camera that enables what Apple calls "portrait mode" for taking shots with a blurred background - a feature more commonly found on large, expensive digital cameras.
It is a strategy Apple could use again. Many analysts believe the company will reserve certain features for the premium-priced model of its next, eagerly awaited iPhone - such as a higher-quality display - that could sell for more than $1,000.
So far, customers seem to be willing to pay more for the extra camera in the iPhone 7 Plus, which is one reason that Apple made slightly more revenue selling slightly fewer iPhones in the latest quarter than a year ago, for an average price of $656.
That price was 2 percent higher than 12 months ago, the best improvement in a year. During 2016, selling prices even went into a decline, year on year, during the iPhone 6s cycle after soaring on the release of the original iPhone 6 and 6 Plus, which introduced larger screens to the Apple lineup for the first time.
"The important thing is the average selling price should not fall," said Anil Doradla, a research analyst with William Blair & Co. "I have full confidence that it won't. Apple just doesn't cut pricing to gain market share. It's not in their DNA."