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Will an iPhone 14 price hike dampen sales?

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ZDNet

Nobody wants to pay more for anything, but right now, prices are on the up, and it seems that the iPhone 14 is no exception.

Breaking the bad news to us is TF International Securities analyst Ming-Chi Kuo, who believes that the average selling price (ASP) of the iPhone 14 series will rise by “about 15%”.

Now it’s important to note that this doesn’t mean a 15% price hike. ASP is taking the sales revenue of all the models and dividing that by the number of units sold. ASP can go up not only as a result of a price hike but also because buyers are choosing to buy the more expensive models.

Figuring out the true ASP for the iPhone is a bit of a dark art since we don’t get sales numbers anymore from Apple. Kuo puts the current ASP at around $850 to $900 but expects to see that go up to $1,000 to $1,050.

How much of this will be made up by a price hike is unclear. I’ve seen figures around the $100 mark, which makes sense because Apple likes to keep pricing simple and straightforward.

I think it’s safe to say that this price hike isn’t something that Apple wants to do and is probably not a cash grab. Prices have been increasing across the board all along the supply chain, and it was inevitable that Apple would have to pass this on to consumers because absorbing it would be a slippery slope.

While any price increase will drive up ASP and revenue, I wouldn’t expect it to increase profits by much, if at all.

But the real question is, will a price hike put consumers off?

Well, it’s easy to say yes, and that consumers have become price sensitive, but when it comes to the iPhone, consumers are already gravitating towards buying the more expensive models already.

Also, if Apple rolls out a storage increase to 256GB for the iPhone 14, that will go some way to offsetting the price increase for many.

Also: Apple orders 95 million iPhone 14 units from suppliers

It’s easy to bet against Apple and think that the market for the iPhone is a lot weaker and fickle than it seems, but the truth is that Apple is having very little difficulty selling $1,000+ handsets.

Given how broad the iPhone lineup is now, with handsets ranging from the iPhone SE to Pro Max, the lineup has something in every price range — as long as you’re not looking for an option less than $400, that is.

How do you feel about a possible price increase?




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