11/15 update below. This post was originally published on November 12.
apple introduced world price rises for the iPhone 14 range, with only China and the US escaping the hikes. Now, a new iPhone 15 leak claims that costs are rising much higher, and it looks like no one will escape the hikes this time.
In a new tweet, popular anonymous industry insider LeakApplePro has revealed that Apple’s widely leaked new flagship, the iPhone 15 Ultra, “will cost significantly more to make than the iPhone 14 Pro Max.” While it doesn’t reveal how much this is, it does open the door to price increases across the range.
For those unfamiliar with the iPhone 15 Ultra, it’s expected to replace the Pro Max in Apple’s upcoming iPhone lineup. And “replace” is the critical part of this.
The Ultra was initially hinted at as a fifth iPhone 15 model, a new hero device that showcases the best Apple can do. It’s a strategy that fits in with the company’s flagship iPad Pro and MacBook Pro models ($2,000 and $6,100, respectively). Apple’s highest performing M1 chip is also called ‘Ultra’.
When more leaks are revealed that the iPhone 15 Ultra is simply a rebranding exercise, fears of a huge price increase are allayed. Apple would simply put the iPhone 15 Ultra in place of an iPhone 15 Pro Max, and the lineup: iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Ultra – would be simpler than the X, XR, XS and Pro Max word salad of the last few years. But not so fast.
11/14 Update: LeaksApplePro has provided more information on the rising manufacturing costs of the iPhone 15 Ultra. Talking to me, the leaker says that the new BOM will go up to $100.
While this may not sound like “substantially more,” it’s important to remember that this is the cost to Apple, not the buyer. For comparison, last month Asian Nikkei revealed that the components of the iPhone 14 Pro Max cost Apple $501, with the price of the smartphone starting at $1099. That said, it’s too simplistic to say that $1 in component costs equals $2 added to the selling price. .
“The A16 [iPhone 14 Pro] It is 50 dollars more expensive than the A15 [iPhone 14 and 13] to manufacture,” explains LeaksApplePro “however, the price of the Pro is still surprisingly 999… Apple’s pricing policy is strange. If I had to guess, maybe it’s a $150 raise (but that’s just a guess).”
Another factor is how Apple decides to price the iPhone 15 range internationally. With the iPhone 14 lineup, Apple effectively subsidized prices in the US and China by raising prices for the rest of the world, in some countries up to 20%.
“It’s pretty common,” says LeaksApplePro, “if your costs go up, you make the ‘compliant’ market pay for the less compliant, so everyone is happy.”
The problem is that this is unsustainable in the long run, making it more likely that the US and China will bear the higher costs of this generation. The positive side? At least you still have plenty of time to save.
Update 11/15: LeaksApplePro has contacted me with more information. The leaker singles out Apple’s next-generation A17 chip as a major factor, noting that it will “certainly be more expensive.”
This is an interesting twist because 1. The iPhone 14 Pro A16 was twice as expensive like the A15 used in the iPhone 13 and iPhone 14, and 2. The daily economic news reported in September that Apple had rejected a price increase for the chip from TSMC, its main chip supplier.
“Originally, it was rumored in the industry that TSMC’s price would increase next year, ranging from 6% to 9% depending on the process, but then it was rumored that there was a negotiated correction, and the increase jumped from 3%, and the growth rate of the mature process was 6%”, explains TSMC. “However, the latest rumor is that Apple, a major customer, is refusing to raise the price.”
Given supply chain pressures Apple recognized last week, chances are high that both sides have reached a compromise. However, this issue continues to affect iPhone 14 Pro and Pro Max shipments, with Apple warning: “we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated, and customers will experience slower wait longer to receive your new products. .”
LeaksApplePro also highlights a second, more obvious factor: the move to a titanium chassis. Whether this happens remains to be seen, but, as mentioned below, this is a material that is 35 times more expensive than the stainless steel used for the iPhone 14 Pro and Pro.
Titanium is as strong as stainless steel at just 40% of the weight, a significant factor when, at 240g, the iPhone 14 Pro Max is one of the heaviest phones in the world. Apple could also compromise and double down on the strength of the chassis while making the phone lighter than its predecessor. Something that would help sell the “Ultra” moniker.
Leaks surfaced last month that the iPhone 15 Ultra would have flashy updates like dual front cameras Y a titanium chassis, a material that is about 35 times more expensive than the Pro Max’s stainless steel. So the latest information from LeaksApplePro makes a lot of sense.
While rising manufacturing costs don’t always lead to price increases, you should be prepared when they cost “substantially more.” Apple has margins to preserve. In addition, the company has a clear price structure and it is not a model positioned well above the rest, there are always increases. So if the UItra goes up, the rest of the range will have to close the gap to catch up.
Yes, at a time of extreme inflation and a cost-of-living crisis, it’s shocking to think that Apple will raise iPhone prices for the second year in a row. Even US customers now spend up to 15% more on average when buying iPhones. That’s because the $899 iPhone 14 Plus replaced the $699 iPhone 13 Mini, making the $799 iPhone 14 the new entry point, while its disappointing upgrades pushed more clients to professionals.
So get ready for more iPhone price hikes in 2023. The good news? At least it looks like you will. get USB-C instead…
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