Apple will increase feature gap in the iPhone 15, says Kuo

AppleInsider

Analyst Ming-Chi Kuo predicts that 2023's iPhones will show a greater gap between the regular and Pro models, and also between the iPhone 15 Pro and iPhone 15 Pro Max.

As Apple prepares to take preorders for the iPhone 14 range, Kuo has figures from the industry about what proportion of the different models Apple is ordering from its manufacturers. Based partly on that, he's also extrapolated what he believes is a trend to differentiate models that will become clearer with the iPhone 15.

Kuo reports that a survey of supply chain sources in China reveals that Apple is ordering production of dramatically more Pro models than the regular ones. Together, the "total order allocation for two 14 Pros is about 85%" of Apple's total orders, says Kuo.

He also notes that the "14 Plus has the lowest order allocation (less than 5%)."

Kuo does note that "pre-orders for Apple's high-end products have always been more popular in the early stage." However, he says the difference is more acute this time, "reflecting Apple's product segmentation strategy change (only Pros receive major updates)."

For the first time, Apple has kept its latest processor for the iPhone 14 Pro models, and left the regular iPhone 14 running a version of last year's chip. Kuo thinks this pattern will continue, and that Apple will do more to increase the appeal of future Pro models.

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I believe Apple will create more differentiation between iPhone 15 Pros and iPhone 15 standard models to increase Pro shipment allocation and the new iPhone ASP.

-- (Ming-Chi Kuo) (@mingchikuo)

September 9, 2022

"Taking a step further," Kuo continues, "Apple will also start creating differentiation between the iPhone 15 Pro Max and the iPhone 15 Pro."

"It's the best practice via a precise product segmentation strategy to generate more sales/profits in a mature market," he says.

Kuo does not make any predictions about what feature differences there could be between the iPhone 15 Pro and iPhone 15 Pro Max. However, it would not be the first time Apple has done this -- the iPhone 12 Pro Max had sensor shift optical image stabilization that the iPhone 12 Pro did not.

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avon b7

From Apple's perspective it makes more sense to differentiate on features as they have more models to spread them over now (since they moved on from the two model approach).

They have always used upsell to squeeze (bleed!) more out of users (through storage for example) and now they can start upselling with more feature differences, even if those features come late and at a price. 

It's not great for consumers but it's up to consumers to decide. I jumped ship because I couldn't see the bang for buck that I wanted. 

Apple can always adjust prices to stimulate demand if it slackens. Let's not forget it wasn't long ago that it had to stick huge discounts (through trade-in offers) on its home page before Christmas to stimulate demand. 

I can't help but think that consumers are being undersold again here especially on the non-pro models but the market will decide and Apple has room for manoeuvre. 

illrigger

It's not shocking that the vast majority are getting the Pro. Entry level customers and enterprises are getting the SE, and both standard models are so expensive that financing is needed, so when you are going to keep a device for 2+ years it only makes sense to spend the extra few bucks per month to get the more feature-rich version so it stays relevant longer.

strangedays

avon b7 said:

From Apple's perspective it makes more sense to differentiate on features as they have more models to spread them over now (since they moved on from the two model approach).

They have always used upsell to squeeze (bleed!) more out of users (through storage for example) and now they can start upselling with more feature differences, even if those features come late and at a price. 

It's not great for consumers but it's up to consumers to decide. I jumped ship because I couldn't see the bang for buck that I wanted. 

Apple can always adjust prices to stimulate demand if it slackens. Let's not forget it wasn't long ago that it had to stick huge discounts (through trade-in offers) on its home page before Christmas to stimulate demand. 

I can't help but think that consumers are being undersold again here especially on the non-pro models but the market will decide and Apple has room for manoeuvre. 

This is absurdly wrong. Apple advertised the trade-in promo to make people aware of it and how to lower the price of what is, without a doubt, a high-demand bit of affordable luxury. The highest, even, I’d argue. The iPhone price is high because the demand is (wait for it…) high. MacBooks are higher priced than all the cheap PC notebooks much like iPhones & iPads cost more than all the cheap knockoffs. Offering a trade-in service helps lower this and bring in more buyers. It makes excellent sense and is no admission of weak demand. The job of marketers and sales strategists is to sell more, always.

Your bizarro world view of a chinese knockoff being on top and Apple struggling after it, really paints things very differently for you. 

edited September 2022

davidmalcolm

Kuo is hardly reliable. I suspect the base 14 won’t sell insanely high because it’s basically the insides of a 13 Pro in the housing of a 13. (This is one of the reasons when I was leaving a job where I could get a discount in a 13 in the Spring I took it, the 13 is a good phone. 

Android still hasn’t caught up to the 11 in terms of performance. So it’s not as if reskinning last year’s Pro is an issue when you’re not sure if you can make enough A16 to go around. 

The 14 Plus is going to be a huge seller. You have no idea how many boomers with failing eye sight who don’t want to wear glasses will gladly pay for a 14 Plus. This is a market that Apple has actually intentionally under served for years. They released the SE ostensibly for people who liked the Home Button, but left those who just wanted an upgrade to the 8 Plus in the lurch. Many of those ended up roped into the Pro Max models despite the fact that they can barely see and hardly need 3 cameras. 

For a lot of customers what drove them to the Pro Max was strictly the screen size. I suspect a large number of those people will now opt for the 14 Plus. 

Which isn’t to say the Pro Max will not sell, they’ll still have trouble keeping it in stock. It’s the favourite phone of people who want big screens, have lots of money, and particularly those who want to flash around a phone as a status symbol. (That last group typically being people who have no clue how to use it.)

I think it’s sad to see the mini go, but I understand why they’re just letting the 13 mini happen again this year. They’ll be able to gauge how much depend there is for it. Maybe we’ll see a 15 mini but I have my doubts. 

Personally I would have gone 13 mini but I planned on handing down this phone to my parents at some point and I knew they’d prefer a bigger phone. (And I honestly don’t mind the size of the 13 or my XR before it.)

That said I doubt Apple wants to confuse people too much. This year’s lineup is great. You have the SE and the 12 at the entry level, you can either have a bigger screen and a slower chip or a faster chip no Face ID and smaller screen. 

The 13 mini sticks around for those who want a tiny phone. The 13 sticks around as a better deal than the 14 for what you pay. The 14 is for people who want a bigger number. The 14 Plus is for people who can’t see or with their phone was an iPad. And the Pros exist for this with money to burn. 

Apple has made it clear they enjoy having medium and large devices that are otherwise the same. It works out well with the MacBook Pros, and the iPad Pros. I suspect we’ll see a 15 inch Air soon enough. 

avon b7

StrangeDays said:

avon b7 said:

From Apple's perspective it makes more sense to differentiate on features as they have more models to spread them over now (since they moved on from the two model approach).

They have always used upsell to squeeze (bleed!) more out of users (through storage for example) and now they can start upselling with more feature differences, even if those features come late and at a price. 

It's not great for consumers but it's up to consumers to decide. I jumped ship because I couldn't see the bang for buck that I wanted. 

Apple can always adjust prices to stimulate demand if it slackens. Let's not forget it wasn't long ago that it had to stick huge discounts (through trade-in offers) on its home page before Christmas to stimulate demand. 

I can't help but think that consumers are being undersold again here especially on the non-pro models but the market will decide and Apple has room for manoeuvre. 

This is absurdly wrong. Apple advertised the trade-in promo to make people aware of it and how to lower the price of what is, without a doubt, a high-demand bit of affordable luxury. The highest, even, I’d argue. The iPhone price is high because the demand is (wait for it…) high. MacBooks are higher priced than all the cheap PC notebooks much like iPhones & iPads cost more than all the cheap knockoffs. Offering a trade-in service helps lower this and bring in more buyers. It makes excellent sense and is no admission of weak demand. The job of marketers and sales strategists is to sell more, always.

Your bizarro world view of a chinese knockoff being on top and Apple struggling after it, really paints things very differently for you. 

Nothing bizarro or absurdly wrong in what I said. 

Demand at the time was not high. It was worryingly low and prompted Apple to plant the increased discounts on its front page before Christmas. Front and centre. Totally in your face. That was unheard of for Apple. 

Not only that. It. Decided to manage those increased discounts directly itself and not through a third party.

It also allowed Chinese retailers to direct discount phones to stimulate demand.

And IIRC there were all hands meetings chaired by Tim Cook to manage the bottom falling out of demand. 

It is the sole reason my wife now has an XR. I wasn't going to pay the obscene prices Apple wanted for what was on offer. 

libertyandfree

avon b7 said:

StrangeDays said:

avon b7 said:

From Apple's perspective it makes more sense to differentiate on features as they have more models to spread them over now (since they moved on from the two model approach).

They have always used upsell to squeeze (bleed!) more out of users (through storage for example) and now they can start upselling with more feature differences, even if those features come late and at a price. 

It's not great for consumers but it's up to consumers to decide. I jumped ship because I couldn't see the bang for buck that I wanted. 

Apple can always adjust prices to stimulate demand if it slackens. Let's not forget it wasn't long ago that it had to stick huge discounts (through trade-in offers) on its home page before Christmas to stimulate demand. 

I can't help but think that consumers are being undersold again here especially on the non-pro models but the market will decide and Apple has room for manoeuvre. 

This is absurdly wrong. Apple advertised the trade-in promo to make people aware of it and how to lower the price of what is, without a doubt, a high-demand bit of affordable luxury. The highest, even, I’d argue. The iPhone price is high because the demand is (wait for it…) high. MacBooks are higher priced than all the cheap PC notebooks much like iPhones & iPads cost more than all the cheap knockoffs. Offering a trade-in service helps lower this and bring in more buyers. It makes excellent sense and is no admission of weak demand. The job of marketers and sales strategists is to sell more, always.

Your bizarro world view of a chinese knockoff being on top and Apple struggling after it, really paints things very differently for you. 

Nothing bizarro or absurdly wrong in what I said. 

Demand at the time was not high. It was worryingly low and prompted Apple to plant the increased discounts on its front page before Christmas. Front and centre. Totally in your face. That was unheard of for Apple. 

Not only that. It. Decided to manage those increased discounts directly itself and not through a third party.

It also allowed Chinese retailers to direct discount phones to stimulate demand.

And IIRC there were all hands meetings chaired by Tim Cook to manage the bottom falling out of demand. 

It is the sole reason my wife now has an XR. I wasn't going to pay the obscene prices Apple wanted for what was on offer. 

I don’t recall the demand for iPhone ever being anything other than high for months after it’s introduction.  Your defined not high means what?   Demand was off by a few percentage points.  Samsung and anyone else should love to have that non problem.

avon b7

libertyandfree said:

avon b7 said:

StrangeDays said:

avon b7 said:

From Apple's perspective it makes more sense to differentiate on features as they have more models to spread them over now (since they moved on from the two model approach).

They have always used upsell to squeeze (bleed!) more out of users (through storage for example) and now they can start upselling with more feature differences, even if those features come late and at a price. 

It's not great for consumers but it's up to consumers to decide. I jumped ship because I couldn't see the bang for buck that I wanted. 

Apple can always adjust prices to stimulate demand if it slackens. Let's not forget it wasn't long ago that it had to stick huge discounts (through trade-in offers) on its home page before Christmas to stimulate demand. 

I can't help but think that consumers are being undersold again here especially on the non-pro models but the market will decide and Apple has room for manoeuvre. 

This is absurdly wrong. Apple advertised the trade-in promo to make people aware of it and how to lower the price of what is, without a doubt, a high-demand bit of affordable luxury. The highest, even, I’d argue. The iPhone price is high because the demand is (wait for it…) high. MacBooks are higher priced than all the cheap PC notebooks much like iPhones & iPads cost more than all the cheap knockoffs. Offering a trade-in service helps lower this and bring in more buyers. It makes excellent sense and is no admission of weak demand. The job of marketers and sales strategists is to sell more, always.

Your bizarro world view of a chinese knockoff being on top and Apple struggling after it, really paints things very differently for you. 

Nothing bizarro or absurdly wrong in what I said. 

Demand at the time was not high. It was worryingly low and prompted Apple to plant the increased discounts on its front page before Christmas. Front and centre. Totally in your face. That was unheard of for Apple. 

Not only that. It. Decided to manage those increased discounts directly itself and not through a third party.

It also allowed Chinese retailers to direct discount phones to stimulate demand.

And IIRC there were all hands meetings chaired by Tim Cook to manage the bottom falling out of demand. 

It is the sole reason my wife now has an XR. I wasn't going to pay the obscene prices Apple wanted for what was on offer. 

I don’t recall the demand for iPhone ever being anything other than high for months after it’s introduction.  Your defined not high means what?   Demand was off by a few percentage points.  Samsung and anyone else should love to have that non problem.

Can you think of any other reason for Apple to authorise sharp discounts through Chinese third party retailers, temporarily override trade-in discounts from contracted partners and push the discounted prices onto the landing page of it websites? All just a few short months after release and right before its blowout sales season?

The whole thing was discussed right here on AI.

In fact, when I approached the online Apple Store for the new pricing information (before making a 100km round trip to get the XR), I was told the discounts had been so last minute that they had no information on how much it might cost because the 'official' online trade-in prices (which were still showing up online) had been overridden. I would have to consult the physical store.

All of this was later confirmed in-store and basically effected worldwide.