Amid a sluggish global market for smartphones this year, Apple's strategy may involve raising the price for its new iPhone.
On Monday, July 24, Eastern Time, media sources cited insiders who revealed that Apple has requested suppliers to produce approximately 85 million units of the iPhone 15 this year. The goal is to maintain steady iPhone shipments even as global smartphone sales are expected to decline due to macroeconomic influences. However, Apple's total iPhone revenue might increase as the tech giant considers raising the price for the high-end iPhone Pro models.
The media did not disclose the extent of Apple's proposed price increase, and the company has not commented on these reports.
Apple usually launches new iPhones each September, and since 2019, the starting price for the iPhone Pro has been $999 in the U.S., with the larger screen Max model starting at $1,099.
Some commentators have noted that since the outbreak of the COVID-19 pandemic, Apple has not increased the price of the new iPhone models launched in the U.S. However, due to exchange rate fluctuations, prices in some regions have varied. For example, the iPhone 14 launched last year in the U.K., Japan, Germany, and Australia had a higher starting price than the iPhone 13 in these locales.
Recently, there have been rumors of a possible supply shortage for Apple's high-end iPhone models, which could impact sales performance this year.
Last week, Wall Street Journal noted reports that Apple might face challenges assembling the iPhone 15 Pro and Pro Max due to a new manufacturing process aimed at reducing bezel width, potentially causing a shortage of these new models when launched in September.
Media reports suggested that the iPhone 15 Pro Max may face more significant issues, potentially resulting in a more severe shortage than the iPhone 15 Pro.
Importantly, these technical issues impact high-end iPhone products. Pro and Pro Max series iPhones usually retail at least $200 higher than base models, indicating higher profit margins. A shortage of these phones at launch could negatively affect Apple's short-term performance.
Recent data shows that the global smartphone market continued to decline in the first half of this year. Canalys, a tech market analysis firm, reported last Tuesday that global smartphone shipments in the second quarter of this year dropped 11% year-on-year, marking the sixth consecutive quarter of decline and forcing industry leaders like Apple and Samsung to reduce sales volumes.
However, Canalys pointed out that the smartphone market is showing early signs of recovery. As phones start to clear inventory, suppliers prioritize handling older models' stocks to make room for new product launches. Apart from Samsung and Apple, which rank first and second in market share, other brands are showing signs of improved shipments as most suppliers' inventories return to healthier levels and macroeconomic conditions stabilize.
