During a conference call with investors, Apple CEO Tim Cook made an impromptu remark that may reveal a lot about the company’s plans.
Cook questioned whether the increase in the iPhone’s average retail price is sustainable. After all, the top model that cost $1,150 in 2017 (iPhone X with 256 GB of storage) now costs $1,600 (iPhone 14 Pro Max with 1 TB of storage). The head of Apple gave an answer to this question. In his opinion, price increases are not a problem. In fact, consumers could be persuaded to spend even more.
“I think people are really willing to push themselves to get the best they can afford in this category,” Tim Cook said.
He added that the iPhone has become an “integral part” of people’s lives. According to him, consumers now use this device to make payments, manage smart home appliances, monitor their health and store banking data.
While Cook didn’t say whether he expects further price hikes for Apple’s smartphones, he made a good case for why even higher-end iPhones could make sense, especially if they provide new features.
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FINANCIAL ANALYSIS
There have already been discussions within Apple about adding a higher-end iPhone to its smartphone lineup. And the company is already introducing significant differences between the standard iPhone models and the upgraded Pro versions, giving consumers a reason to pay more.
When the iPhone 15 arrives this year, Apple will further differentiate the devices with materials, processors and cameras. Including the Pro Max model will receive a periscopic lens that will provide improved optical zoom.
According to rumors, Apple’s plan was to make the difference between the Pro and Pro Max models even more noticeable by calling its top-of-the-line smartphone the Ultra. Apple has already used this name for a high-end sports smartwatch and the top version of the M1 processor. But instead of renaming the Pro Max the Ultra, Apple could add another higher-end version of the iPhone on top of both Pro models. There have been discussions within the company, and an additional premium version of the iPhone Ultra may appear with the release of the 2024 lineup.
This can certainly increase the price, but consumers need a reason to switch to the more expensive version. At the moment, it is not clear how this top model will differ. It will likely offer further camera improvements, a faster chip and a larger display. For example, Apple can market a foldable smartphone. Other promising functions, unavailable in “more budget” Apple smartphones, may also be implemented.
Note that Samsung has already taken this approach in its Ultra phone. This model offers more cameras and more megapixels in the main camera, a bigger battery, a bigger screen, stylus support, more memory and a different design. In addition, Samsung offers two types of foldable smartphones.
Source: Bloomberg
