iPhones are about to get more expensive. Recent iPhone 14 leaks claim Apple will raise prices, though there is disagreement on how much and which models. Now, one of the industry’s most respected insiders has an explanation.
In new tweets, TF International Securities analyst Ming-Chi Kuo estimates that the “iPhone 14 series ASP [average selling price] would increase by about 15% vs iPhone 13 series ASP.” Yes, 15% is significantly higher than previous price leaks, and it has set alarm bells ringing about a potential $1300 entry-level iPhone 14 Pro Max. But the full picture is a little more complicated.
Kuo explains that the average ASP for iPhone 14 models will be circa $1,000-$1,050 “due to two iPhone 14 Pro’s price hikes and higher shipment proportion.”
Breaking this down is difficult, but Kuo’s numbers indicate that the iPhone 13 range’s ASP was closer to $900. This means customers are expected to pay, on average, roughly $150 more when buying an iPhone 14 compared to an iPhone 13. On the surface, this is one of the biggest jumps in ASP in iPhone history.
Furthermore, Kuo says more people will buy iPhone 14 Pro models, despite their price rises. How will Apple achieve this? It’s a classic case of pull and push.
First, in an effort to ‘differentiate’ Pro and non-Pro models / upsell customers, Apple will equip iPhone 14 Pro models with more exclusive upgrades than ever before, creating a clear ‘pull’. With the combination of functionality and desirability, Apple is expected to raise prices by $100. This will lift the starting prices for the iPhone 14 Pro and iPhone 14 Pro Max to $1099 and $1199, respectively.
Second is the push because there is likely to be palpable disappointment in the standard iPhone 14. The base model will offer only the most incremental iPhone 13 upgrades, pushing users to buy the more expensive Pro models.
Third, a lot of the heavy lifting will be done by the iPhone 14 Max. This new $899 6.7-inch model will replace the $699 iPhone 13 Mini. That’s a $200 price difference, but a relatively small $100 increase for disappointed iPhone 14 buyers now looking for something more. Furthermore, the Max will sit above the $799 iPhone 14, which means the entry point to the new models has also increased by $100.
Factor in all these changes and a $150 increase in average spend per customer makes a lot of sense. Consequently, if you are committed to buying an iPhone 14 this year (and with USB-C coming in 2023, I’d suggest you shouldn’t be), don’t be surprised if you end up spending a lot more than you planned.
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