- Apple’s strategic plan to combat declining smartphone sales.
- Production challenges with display panels impacting launch availability
- The smartphone market is projected to decline by 3.2% in 2023.
- Apple’s confidence in customers’ willingness to pay for the best product.
A recent report by Bloomberg reveals that Apple is allegedly devising a strategic plan to augment revenue amidst an anticipated decline in smartphone sales. They plan to do this by raising the cost of the upcoming iPhone 15 Pro and Pro Max models.
Apple has set an ambitious target to produce approximately 85 million units of the iPhone 15 this year, a figure closely mirroring last year’s request for 90 million units of the iPhone 14 from suppliers.
The aim is to maintain a high revenue stream, even amidst inflation and reduced consumer tech demand, by elevating the price of their higher-end iPhone models.
However, achieving this target might be an uphill battle for Apple. Reports indicate that production woes concerning the iPhone 15 Pro and Pro Max display panels could impact the number of units available at launch.
Moreover, the company reportedly had to abandon plans to increase iPhone 14 production by an extra 6 million units last year when the expected surge in holiday season demand failed to materialize.
According to an IDC report released in May, the global smartphone market is projected to decline by 3.2 percent in 2023, with an anticipated recovery in the following year.
Adding context, since the introduction of the iPhone 11 Pro in 2019, the iPhone Pro and Pro Max models have debuted with a starting price of $999 and $1,099, respectively.
While the new price points are yet to be disclosed, it is asserted that the standard iPhone 15 and iPhone 15 Plus will maintain pricing consistency with previous generational releases at $799 and $899, respectively.
Apple remains optimistic that a price increase will not deter customers from purchasing its flagship iPhones. During an earnings call in February, Apple CEO Tim Cook expressed confidence that consumers are willing to stretch their budgets to acquire the best product in this category, asserting, “I believe people are willing to go out of their way to get the best they can afford in that category.”