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Apple’s Move to Upscale iPhone Pricing
According to a recent report by Bloomberg, Apple is reportedly contemplating raising the prices of its upcoming iPhone 15 Pro and Pro Max models as a strategic move to bolster revenue during an anticipated decline in smartphone sales. The tech giant aims to produce approximately 85 million iPhone 15 units this year, closely following the 90 million iPhone 14 units requested from suppliers the previous year. By maintaining a similar production volume but raising prices on its higher-end models, Apple hopes to sustain its revenue despite factors like ongoing inflation and decreased consumer tech demand, as informed by “people familiar with the matter.”
The smartphone market has witnessed declining demand, which apparently prompted Apple to cut iPhone 14 production by 6 million units in the previous year. This downward trend poses challenges for Apple in meeting its production targets. Furthermore, the company is reportedly grappling with production issues related to display panels for the iPhone 15 Pro and Pro Max, which might impact the number of units available upon launch. Last year, Apple also had to forgo plans to increase iPhone 14 production by an additional 6 million units, as the anticipated surge in holiday season demand did not materialize. According to an IDC report from May, global smartphone shipments are expected to decline by 3.2 percent in 2023, with the market predicted to begin recovering next year.
Apple is reportedly considering increasing the price of the upcoming iPhone 15 Pro models to increase revenue
Would you be willing to pay $100+ more for the new iPhones?
Source: @Bloomberg pic.twitter.com/swvHO4ITXE
— Apple Hub (@theapplehub) July 24, 2023
Historically, iPhone Pro and Pro Max models have been launched with starting prices of $999 and $1,099, respectively, since the introduction of the iPhone 11 Pro in 2019. While specific details regarding the extent of the price increase remain undisclosed, it is reported that the standard iPhone 15 and iPhone 15 Plus will maintain consistent pricing with previous generational releases, starting at $799 and $899, respectively.
Despite the price hike, Apple appears confident that it will not deter customers from purchasing its flagship offerings. During an earnings call in February, Apple CEO Tim Cook expressed his belief that customers are willing to stretch their budget to acquire the best product in that category. This optimism suggests that Apple expects the demand for iPhones to remain resilient despite the potential price increase.
