Catherine Thorbecke, CNN Business
Apple is widely expected to unveil its new iPhone 14 lineup at an event scheduled for next Wednesday, but there is still a big question mark in this economy about how much the tech giant will charge for its latest and greatest smartphones. attached.
Apple has famously loyal customers. But with broader economic forecasts pulling left and right, it may be a tough time to convince people to upgrade their iPhones.
“Apple faces a real pricing conundrum,” said Ben Wood, chief analyst at market research firm CCS Insight. He noted that the company is also facing rising costs associated with iPhone parts and shipping.
“My guess is that Apple will probably have to step up the price,” Wood told CNN Business. But given the burden facing consumers, he believes Apple will also “do everything it can to minimize it as much as possible.”
Beyond widespread signs of an economic downturn, Apple is also facing another headwind as it gears up for product launches next week. Supply chain problems stemming from China’s zero Covid policy were partly linked to the company’s reported 11% year-on-year decline in quarterly earnings last month. “There is no clear evidence of a macroeconomic impact” on iPhone sales, the company’s CEO said on the earnings call. Cook added that the company set third-quarter records “both in terms of revenue and switchers to his iPhone,” adding that “customers continue to recognize that the iPhone remains the gold standard for smartphones.” I do,” he added.
The strong iPhone sales are partly linked to some industry insiders’ predictions that Apple will raise the prices of its latest iPhones, but it’s difficult to predict exactly how much. is.
Ming-Chi Kuo, an influential Apple analyst based in Asia, said: murmured He said earlier this month that he expects Apple to raise the average selling price of the iPhone 14 lineup by about 15% compared to the iPhone 13 lineup. (Currently, his regular non-mini iPhone 13 starts at $799, the iPhone 13 Pro starts at $999, and the iPhone 13 Pro Max starts at $1,099.)
Wedbush Securities analysts Dan Ives and John Katsingris predicted in a research note on Monday that Apple will raise the price of its latest high-end model by about $100. “We believe his $100 price increase for the iPhone 14 Pro/Pro Max is likely in store, given the increased component prices and feature additions in this new release,” the memo said. I’m here. The cameras on upcoming iPhone Pro models are rumored to be upgraded to justify the higher price.
Wedbush analysts also forecast strong underlying demand for the upcoming iPhone, estimating that of the 1 billion iPhone users worldwide, about 240 million have not upgraded their phones in over three and a half years. I’m here.
Wood also pointed out that Apple’s iPhone is in some ways shielded from macroeconomic pressures. Consumers are also increasingly viewing smartphones as “almost essential” compared to other tech gadgets. “It’s questionable whether he really needs an iPhone, but people who already have an iPhone are incredibly loyal,” he says Wood.
“I think Apple has some advantages over its rivals,” he added. “There are always people waiting for a new iPhone.”
Apple, which has been known to be tight-lipped during the lead-up to product launches, did not respond to CNN Business’s request for comment on the price of its latest iPhone on Monday. The company sent out invitations for the September 7th event last week.
The event will be broadcast on Apple’s website from its headquarters in Cupertino, California, beginning at 1:00 PM ET.
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