With Apple widely expected to unveil its new iPhone 14 lineup in the future next Wednesdaythe big question mark still surrounds you, in this economyThe tech giant will charge for its latest and greatest smartphones.
Apple has some famously loyal customers. However, as with the broader economic outlook lowered Right and left, it can be hard to convince people to upgrade their iPhone.
“Apple is facing a real price puzzle,” said Ben Wood, chief analyst at market research firm CCS Insight. On top of the inflation and cost-of-living pressures that have gripped consumers, he noted that Apple is simultaneously facing rising costs associated with iPhone components and transportation.
“My expectation is that Apple may have to raise prices,” Wood told CNN Business. But given the stress consumers are facing, he believes Apple will also do “everything in its power to keep this to a minimum”.
Besides the broader signs of a worsening economy, Apple is also facing other headwinds as it prepares to launch the product next week. The supply chain hiccups caused by China’s zero-Covid policy have been partially linked to the company 11% annual decrease in quarterly earnings I mentioned last month. Apple CEO Tim Cook said on the earnings call, however, that there was “no clear evidence of a macroeconomic impact” on iPhone sales. Cook added that the company set a record in the third quarter “for both revenue and transfers to the iPhone,” adding that “customers continue to discover that the iPhone remains the gold standard for smartphones.”
The steady iPhone sales are linked in part to other predictions from some industry insiders that Apple will raise the price of its latest iPhones — although it’s hard to predict by how much.
Ming-Chi Kuo, an influential Apple analyst based in Asia, chirp Earlier this month, expect Apple to raise the average selling price of the iPhone 14 lineup by about 15% compared to the iPhone 13 lineup. (Currently, the regular, non-miniature iPhone 13 starts at $799, the iPhone 13 Pro starts at $999, and iPhone 13 Pro Max ($1099).
In a research note on Monday, analysts Dan Ives and John Katsingris of Wedbush Securities expected Apple to raise the price of its latest high-end model by about $100. The note stated, “We believe that the iPhone 14 Pro/Pro Max price increase of $100 is likely in store due to the higher component prices as well as the functionality added in this new version.” It is rumored that the cameras in upcoming iPhone Pro models will be upgraded to justify the price increase, among other improvements.
Wedbush analysts also forecast strong underlying demand for the upcoming iPhone, estimating that about 240 million of the 1 billion iPhone users worldwide have not developed their phones in more than three and a half years.
Wood also noted that Apple’s iPhones are in some ways insulated from macroeconomic stresses. Consumers are also increasingly viewing smartphones as “almost basic” compared to some other tech gadgets. “Whether or not you really need an iPhone is open to questions, but people who already have an iPhone are incredibly loyal,” Wood said.
“I think Apple has some advantages over competitors,” he added. “There are people who are always waiting for a new iPhone.”
Apple, in its popular fashion during the lead up to its product launches, did not respond to CNN Business’s request for comment on the latest iPhone pricing. The company sent out invitations last week for the September 7 event, which it dubbed “Away.”
The event will be streamed on Apple’s website from the company’s headquarters in Cupertino, California beginning at 1 p.m. EST.
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