iPhone 16 price increases could subdue an Apple Intelligence super-cycle

AppleInsider

Investment firm Piper Sandler believes Apple Intelligence will not boost iPhone 16 sales at first, and an expected price hike may impact demand.

Renders of a possible designs for the iPhone 16 range

In July 2024, Piper Sandler raised its Apple target price to $225 specifically because of Apple Intelligence. Ahead of the iPhone 16 launch, the company still believes that Apple Intelligence will be key -- but not immediately.

That's because the features of Apple Intelligence will launch later in the year, rather than coming out alongside the iPhone 16 range. Then, too, the company says that it wants to see Apple do more to market the benefits of Apple Intelligence, given "the lack of a killer consumer AI app" to date.

Piper Sandler is not expecting "any revolutionary hardware innovations," but also wonders whether Apple can continue to keep its existing iPhone pricing. It's possible, say the analysts, that Apple will have to charge more because of the costs of Apple Intelligence.

That plays into how the analysts also believe that consumer discretionary spending "is cracking." Any iPhone price increase, then, could be problematic.

But then Piper Sandler says that "the potential for an SE version Apple Watch and a lower priced AirPods alternative could prove to be valuable in the current economic backdrop."

Given all this, Piper Sandler argues that the value of Apple Intelligence is already represented in its existing price target of $225, so it is not changing that.

Apple will announce its iPhone 16 range -- plus Apple Watch and potentially new AirPods -- in its "It's Glowtime" event on September 9, 2024.



Read on AppleInsider

DAalseth

My plan is to upgrade to a ProMax. It will be the most I’ve ever spent on a phone but I’m ok with that. But if Apple bumps them up another hundred bucks, I’ll likely go with the Pro instead. If they go more then that, I’ll be seriously considering waiting another year. You can’t get blood from a stone. 

ssfe11

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse. 

M68000

ssfe11 said:

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse. 

I would just be happy if they finally do 120hz screens on all current phones they sell.  At the moment, not feeling excited about all this AI stuff, Apple or otherwise.   I’m concerned about an “AI” phone (whatever that is) that will interrupt the user and annoy. But the marketing people are full steam ahead so get used to the advertising…

DAalseth

ssfe11 said:

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse. 

Not for me. I have an 11 and it’s really time. Apple Intelligence is not helping make the sale, actually to the contrary. 

kdupuis77

ssfe11 said:

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse. 

The whole overhyping of Apple Intelligence gives me the Apple Watch Series 9 double tap pinching thing vibes. They made such a big deal about that feature, I got my Series 9 and whoop-de-doo it sucks lol. And then they took away an objectively more useful feature shortly after in the pulse oximeter sensor. I'm about due to upgrade iPhones, but I think I may also take the "downgrade" to the regular Pro model to absorb some of the inevitable price increase this go around.

dewme

Apple could mitigate the price increase blowback by releasing an iPhone Air or SE with enough of the internal components from the iPhone 15 Pro to have a lower price point for Apple Intelligence users with budget limitations. 

ApplePoor

I wonder if the brain trusts at Apple remember the story of the Golden Goose?

All their top models have sky high prices that are really absurb for the general public.

The estimates of their cost structures from the bills of material suggest a nearly doubling of their costs for the top models (especially where  memory and SSD prices are concerned). Apple currently charges $2,200 for their 8TB option SSD vs about half that amount for the 8TB SSD from OWC than can connect to other devices es over USB-C.

The left over discretionary funds for the majority of folks here is a decreasing number as all the other costs of “living” are going up due to corporate greed. Just look at their profits in their required reports.,

danox

Isn’t Apple Intelligence a wait-and-see at this point if it works as mapped by Apple that will drive sales, will the integration of all the different elements work better in comparison to Apples competition. (Windows Recall Co-Pilot or Google Gemini)   

I don’t think the competition has the hardware/power and software integration, combined with the ability to iterate relentlessly over time in the same manner that Apple does.

gatorguy

DAalseth said:

My plan is to upgrade to a ProMax. It will be the most I’ve ever spent on a phone but I’m ok with that. But if Apple bumps them up another hundred bucks, I’ll likely go with the Pro instead. If they go more then that, I’ll be seriously considering waiting another year. You can’t get blood from a stone. 

Presumably, the iPhone 16 base price will be the same as it was last year. From reading assorted Apple bloggers, there's a bit more stockholder pressure to perform this year compared to recent years.  Not raising purchase cost in a tightened economy with challenges from better competition can be an advantage.