Tech Giants Apple is set to increase the average price of their most sold item, the iPhone. As the demand for the new iPhone 14 and 14 Pro increases, the company has decided to increase the price of the iPhone twice in the next few months. This will not only increase the company’s margins but will also create a market gap for the product.
According to research based on projects on consumer demand, market intelligence, and suppliers, the average price for the new iPhone 14 will rise to approximately $892 in September and $944 in December. Currently, the average selling price for the fourth quarter of last year is $873. The iPhone accounts for around 50% of the company’s revenue and is also considered a key Apple metric for Wall Street.
This surge in the price is due to the rising demand and popularity of the newly launched iPhone 14 models, which feature hardware and software changes, most noticeably being the “Dynamic Island” in the Pro model. This has led to more people opting for the Pro model compared to the regular model, driving sales and the demand sky-high. It is also anticipated that at this rate, the average selling price for the iPhone 14 would be 10% higher than the iPhone 13 cycle.
The rise in the average selling price for the fourth quarter of 2022 is also due to the fact that Apple has regained solid ground in China after the downfall of Huawei and also because of 5G enabled iPhones. Due to the fact that China is a vast market, having a solid presence there, Apple’s share in the Chinese market increased from 15.9% to 23% from late 2020 to late 2021.
The surge in the trajectory of the iPhone’s average selling price lies in Apple’s success strategy, which began in 2018. Today, analysts believe that Apple is moving to another strategy where its focus would be to increase revenues from its users by providing an expanded array of services. This can be done by enabling users to pay monthly fees to use services such as Apple One, Apple Music, and iCloud.