Apple is giving its loyal customers a small relief by not hiking the prices on its newest iPhone models.
Key details
One of the surprises from Apple’s reveal event this week was the absence of a price hike. Many expected that a $100 increase was a forgone conclusion but that didn’t come to pass at Tuesday’s event at Apple headquarters in Cupertino, California.
The newly announced iPhone 14 Pro comes for $999, and the iPhone 14 Pro Max is for $1,099.
“Apple has long shown a willingness to charge premium prices for its iPhones, including breaking the $1,000 barrier a few years back with the iPhone X, and was expected to increase prices on the smartphones again with the iPhone 14 unveiling on Wednesday,” says MarketWatch.
“[Apple CEO Tim] Cook kept the price the same as the last two iPhone models, however, and even added in some other deals: Free satellite emergency service for two years, and an update to Apple Care+ to remove a limit on the number of repairs each year.”
Why it’s news
Apple may be offering its customers a break, as MarketWatch suggests, but the decision likely reflects market fatigue and the need to keep its sales in line with its levels of innovation.
Apple releases new iPhone models every year and a pause on prices is a strategic decision, especially for a phone that only offers moderate innovations from its predecessor.
“This was their opportunity, they were going to fork the line, and have very affordable and very flagship, and that was surprising that didn’t happen. I think that is the right move. It’s becoming difficult to get people to upgrade, they hold onto them longer, they are not inexpensive,” says Lopez Research analyst Maribel Lopez.
Key takeaways
Apple may pause on price hikes until it has new technology or innovation to show with its subsequent models and upgrades.
As we previously reported, Apple is rumored to have some major product reveals coming within the next year such as their own virtual reality product. It may integrate these new technologies into its next iteration of the iPhone and raise the price then.
“Apple never shows off the next big thing without a fully formed product ready to roll. So instead, Cook is just trying to keep consumers happy with new iPhones—at flat prices with better cameras, longer battery life, and new features—until its next foray is actually ready,” says MarketWatch.
The lack of a price hike may concern Apple’s investors though, as inflation and economic stress hit the phone developer and potentially lowers sales in the near future. Its brand name though may help it weather out the downturn better than other companies.
“The 15-year-old iPhone family is still Apple’s biggest revenue and profit generator, even as it is a mature product, so a margin decline would be felt acutely on the overall bottom line,” says MarketWatch.