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“Apple has a pricing problem,” said Ben Wood, principal analyst at market research firm CCS Insight. In addition to inflationary and cost-of-living pressures that are taking a toll on consumers, Apple is also facing rising costs associated with iPhone components and transportation, he said.
“My expectation is that Apple will have to raise prices,” Wood told CNN Business. “But given the pressure consumers are facing, I think Apple will do everything they can to keep it as small as possible.”
Firm iPhone sales are partly related to predictions by some industry experts that Apple will increase the price of its new iPhones — though by how much is hard to predict.
In a research note Monday, Wedbush Securities analysts Dan Ives and John Katsingris predicted Apple would raise the price of its new high-end models by $100. “We believe a $100 price increase on the iPhone 14 Pro/Pro Max is in store, based on the increased functionality and added functionality of this new release,” the note said. The cameras on the upcoming iPhone Pro models are said to be upgraded to account for the price hike and other improvements.
Wedbush analysts predict strong demand for the next iPhone, with 240 million of the 1 billion iPhone users worldwide not having upgraded their phones in more than three and a half years.
Wood also pointed out that Apple’s iPhones are in some ways immune to macroeconomic pressures. Compared to other technology gadgets, consumers view smartphones as “very important”. “Of course, whether you want an iPhone or not is open to question, but people with iPhones are already incredibly loyal,” Wood said.
“I think Apple has some advantages over competitors,” he added. “There are always people waiting for a new iPhone.”
Apple, in its famously tight-lipped fashion, did not respond to CNN Business’ request for comment on iPhone pricing Monday. The company sent out invitations last week for its September 7 event, which is cryptically dubbed “Far Away.”
The event will be broadcast on Apple’s website from the company’s Cupertino, California headquarters starting at 1 p.m.
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