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Why the new iPhone could cost more

Apple has famously loyal customers. But persuading people to upgrade their iPhones may be difficult as the broader economic outlook is declining left and right.

“Apple faces a real price puzzle,” said Ben Wood, chief analyst at market research firm CCS Insight. and the rising costs associated with transportation at the same time, he noted.

“My guess 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 make it as little as possible.”

In addition to widespread signs of economic weakness, Apple faces other headwinds as it gears up for product launches next week. Supply chain problems caused by China’s zero Covid policy are partly linked to the 11% annual decline in the company’s quarterly earnings I mentioned last month. The CEO said on the earnings call that there was “no clear evidence of a macroeconomic impact” on iPhone sales. Cook added that the company set records “in both revenue and iPhone transfers” in the third quarter, adding that “customers continue to discover that the iPhone is still the gold standard for smartphones.” rice field.

Strong iPhone sales are partly linked to another prediction by some industry insiders that Apple will raise the prices of its latest iPhones, but by how much is difficult to predict.

Ming-Chi Kuo, an influential Apple analyst based in Asia, said: Chirp Earlier this month, Apple expects 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 the iPhone 13 Pro Max ($1099).

Wedbush Securities analysts Dan Ives and John Cassinglis said in a research note Monday that they expected Apple to raise the price of its latest high-end model by about $100. We believe the Pro Max price will likely increase by $100 not only because of the features added in this new version, but also because of higher component prices.” The cameras on upcoming iPhone Pro models are rumored to be upgraded to justify the higher price, among other improvements.

Wedbush analysts also forecast strong underlying demand for the next iPhone, with about 240 million of the world’s 1 billion iPhone users without a mobile phone in more than three and a half years. I’m assuming.

Wood also said Apple’s iPhones are somehow protected from macroeconomic stress. Consumers are also increasingly viewing smartphones as “almost basic” compared to other tech gadgets. “It’s questionable whether you really need an iPhone, but people who already have an iPhone are incredibly loyal,” said Wood.

“I think Apple has some advantages over its competitors,” he added. “There are always people waiting for a new iPhone.”

Apple, in the popular fashion leading up to the product launch, did not respond to CNN Business’s request for comment on the pricing of its latest iPhone. The company sent out invitations last week to a Sept. 7 event dubbed “Away.”

The event will be streamed on Apple’s website from the company’s headquarters in Cupertino, Calif., beginning at 1:00 p.m. ET.

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