Apple will test the limits of how much people are willing to pay for the iPhone Pro. Analysts expect the company to raise prices on select iPhone 15 family models by $100 over their iPhone 14 family predecessors, as the company tries to boost revenue despite a downturn in the global smartphone market.
Apple’s focus on attracting consumer attention to its premium iPhone Pro and Pro Max models has delivered phenomenal results in recent years, increasing revenue and profit even as unit sales declined. Potential price increases will help offset rising component costs due to inflation, but some analysts believe this strategy will soon reach its limit. “The iPhone Pro has probably reached saturation,” said Josh Lowitz, co-founder of Consumer Intelligence Research Partners. “I don’t think there will be many new iPhone Pro buyers.”
With the iPhone 15 family, Apple will have to convince buyers that features the Pro models don’t have on regular iPhones are reason enough to make an expensive upgrade. “It’s getting harder and harder for consumers to determine what the new features of the iPhone Pro are,” said Michael Gartenberg, a former senior director on Apple’s marketing team who left the company in 2016 to become an independent technology consultant. “For most users, the iPhone 13 will be good enough, and the base iPhone camera takes pretty good photos.”
In addition to new processors and updated cameras, the iPhone 15 Pro and 15 Pro Max are expected to feature a titanium body that is lighter than the stainless steel body of standard iPhones. It is also expected that in older new products the standard sound switch will be replaced with a button that can be configured to perform certain actions, for example, quickly launch the camera or turn on the flashlight.
At the same time, the more affordable base iPhone 15 and 15 Plus will not have some of the features of the older models and will receive less advanced specifications, in particular, last year’s Apple A16 Bionic processor, which is used in the iPhone 14 Pro. The new iPhone 15 Pro will receive a fresh, more powerful Apple A17 Bionic.
However, one of the important changes that both the regular iPhone 15 and 15 Plus and the older iPhone 15 Pro and 15 Pro Max will have is the transition to a new connector – USB-C, which will replace the proprietary Lightning, which appeared in the iPhone 5 in 2012. The transition to the new standard is being carried out to comply with new European laws, and will be presented by Apple as an innovation, although the company clearly did not want to switch to this port.
The transition to the new standard may cause some hesitation among consumers looking to upgrade their iPhone. Analysts suggest that the change in charging standard may force some users to wait to upgrade their iPhone to a new one, because they will then have to update their chargers and cables.
Apple began releasing the more expensive and advanced iPhone Pro four years ago when the smartphone market began to slow down. In 2019, Apple introduced the iPhone 11 Pro, which gave buyers a more advanced camera system and a better display compared to the base model. Over the years, Apple has added more and more differentiating features to its Pro series phones. So, last year only the iPhone 14 Pro and Pro Max received a new processor, while the regular iPhone 14 and 14 Plus had the old chip from last year’s iPhone.
Apple’s strategy worked. The price of iPhones has remained stagnant since 2020, but Apple’s revenue from their sales has been growing as more consumers opt for premium smartphones. Since 2019, the company has increased iPhone revenue by more than 44%, to $205.5 billion in 2022. This growth occurred despite iPhone unit shipments only increasing by about 15% over the same period, according to Counterpoint Research.
However, gradually the decline in the smartphone market reached Apple. Last quarter, for the first time since 2017, the average selling price of an iPhone in the US dropped to $948, which is lower than the same period last year and the first quarter of this year. iPhone sales fell 2.4% over the past quarter of the year, slightly below analysts’ expectations.
So Apple will have to compete for the attention of buyers to the Pro series models. And this will be even more difficult to do amid the trend of consumers using their smartphones longer and longer, putting off upgrades.
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