Posted Sep 27, 2022, 10:33 AMUpdated Sep 27, 2022, 4:30 PM
Successful bet for Apple. Its decision not to increase the prices of its iPhones to take inflation into account turns out to be a winning choice. Three weeks after their launch, the four iPhone 14s are off to a very good start, starting with the two most premium models in the range, the Pro and Pro Max, which are seeing particularly strong demand. And this despite their price: between 1,329 and 1,979 euros for the first, the second ranging from 1,479… to 2,129 euros.
Not enough to frighten the most tech-savvy consumers. “The proportion of Pros among sales is higher than ever”, explains a French telecom operator, without however giving figures. “Like every autumn, the new iPhones are generating great enthusiasm, but this year the momentum is particularly strong on the Pro and Pro Max. »
“Apart from a few pieces, we are on the same volumes as last year, but the Pro and Pro Max stand out and are the majority in orders,” notes another operator. Faced with demand, Apple has even asked Foxconn to increase its production capacity by freeing up the lines dedicated to the “basic” iPhone 14, according to analyst Ming-chi Kuo.
A new round of sales
For Apple, this is excellent news, because the brand was playing big with the iPhone 14. Between April and June, iPhone sales – which still represent half of its turnover – only increased by 3 %, against more than 5% in the second quarter and even 9% previously. After the classic boost effect linked to the launch of the iPhone 13 last fall (+47%), demand had weakened due to the difficult macroeconomic context, while supply was disrupted by the strict Zero Covid policy in China (where almost all iPhones are assembled). So much so that Apple has chosen to produce part of the iPhone 14 in India earlier than planned.
In this context, the group led by Tim Cook was counting on the iPhone 14 to restart a new cycle. All of tech was waiting to see how the brand would react to inflation. Finally, “Apple has maintained its prices for China and the United States, which alone represent 50% of deliveries”, recalls Chiew Le Xuan, analyst at Canalys. In Europe, on the other hand, the fall of the euro against the dollar means that European consumers will pay more for iPhones.
Three weeks later, Apple is reaping the benefits of this strategy. Customers who have not changed devices for several years are more logically opting for the iPhone 14 Pro and Pro Max than for the “classic” iPhone 14s. And for good reason: the new features (such as the A16 house chip or the Dynamic Island display mode) are only present on the two most premium models. Other customers tend to keep their iPhone 13s, which remain technically very efficient.
“Product mix”
For Apple, this craze for the iPhone 14 Pro and Pro Max is godsend. With this skilfully dosed “product mix”, the apple brand manages to increase the average selling price, without any facial price change on the labels. The average sale price, a key figure for Wall Street, should thus reach 892 dollars this quarter. It is then expected to break above the $900 mark for the first time next quarter, according to Counterpoint Research. However, until now, the previous record, reached at the end of 2021, was “only” 873 dollars.
However, Apple will also have to support sales of its “basic” iPhone 14s to increase volume. In recent days, however, sales have rebalanced, with waiting times for the iPhone Pro and Pro Max forcing customers to switch to the two more affordable models.
