Apple's next-generation iPhone 16 series is expected to launch on September 20 and will compete in a quickly evolving smartphone market, and with some notable upgrades rumored, the new models could see price changes compared to previous years.
Successive iPhone models always come with new features and hardware upgrades, but Apple typically does not increase the retail prices as a result. However, that could change this year due to an increasingly competitive smartphone market, potential supply chain disruptions, and other global economic challenges.
Last year saw a record high for the total cost of an iPhone's components, and could be a harbinger of things to come. According to one report, last year's iPhone 15 models cost more to produce than the previous iPhone 14. For example, iPhone 15 Pro Max is believed to cost Apple $558 to produce, a 12% increase over the iPhone 14 Pro Max model released in 2022.
The other models in the iPhone 15 lineup were also subject to cost increases. The standard iPhone 15's components totaled $423, a 16% increase compared to the iPhone 14. The iPhone 15 Plus is calculated at $442, a 10% increase over its predecessor, while the iPhone 15 Pro grew by 8% to $523.
Despite the increased costs, Apple did not increase the retail prices of any of its iPhone 15 models last year. However, Tokyo-based research company Fomalhaut Techno Solutions believes that Apple's bottom line will be impacted if the company continues to absorb the impact of increased production costs. That could see Apple choose to hike the retail prices of this year's iPhone 16 series.
Speculation about a price hike is also due to a bump in hardware components required to support Apple intelligence. Apple is expected to increase the RAM in the standard iPhone 16 models to 8GB, up from 6GB in the previous versions.
On the other hand, Apple will be wary of hiking prices in the face of the increased cost of living, as well as recent market challenges in Asia that have seen falling sales. For example, iPhone 15 resellers in China have become increasingly dependent on promotional discounts to move stock, indicating Apple's latest iPhone generation is struggling to achieve the same popularity as previous models in China. Additionally, the design of the iPhone 16 is not expected to change significantly, making it even harder to justify a price increase.
Apple is also mass producing iPhone 16 Pro models in India for the first time as it looks to diversify production beyond China, which could potentially result in cost savings. According to a report by The Economic Times, the iPhone maker is anticipated to reduce production expenses by 10% through manufacturing Pro models in India. However, despite these savings, consumers may not see lower prices, as taxes and component costs could well keep retail prices steady.
We don't know with complete certainty what prices Apple will set for its next-generation iPhone models. But it's worth noting that if the starting price of the standard iPhone 16 model remains unchanged ($799), it will have the same starting price as the iPhone 12, which was released in 2020. That said, Apple could remove certain configuration options so that customers are essentially forced to pay more, as it did with the iPhone 15 Pro Max last year.
Prior to the iPhone 15 release, speculation circulated that the iPhone 15 Pro Max might have a higher starting price of $1,199, up from the iPhone 14 Pro Max's $1,099 base price. This prediction proved partially correct, but for a different reason than expected. Apple didn't raise the price outright – instead, it removed the lowest storage option of 128GB for the Pro Max model. As a result, the iPhone 15 Pro Max now starts at 256GB of storage, priced at $1,199 – the same amount Apple previously charged for the 256GB iPhone 14 Pro Max. So while the price-per-gigabyte remained consistent with the previous generation, the entry price increased.
Apple could adopt the same strategy for the iPhone 16 Pro. According to a new TrendForce report, this time Apple is expected to offer both the iPhone 16 Pro and iPhone 16 Pro Max with a minimum of 256GB storage, doing away with the 128GB starting option on its smaller Pro model for the first time.
Apple will debut the new iPhone series on Monday, September 9 at a special event, dubbed "It's Glowtime." For all the details of what we can expect from the four new iPhone 16 models, be sure to check out our dedicated iPhone 16 and iPhone 16 Pro roundups.
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