Apple's iPhone 16 Launch: Pricing Strategy and Production Insights

Apple's iPhone 16 Launch: JPMorgan Says 'Staggered Pricing Approach' Could Offset Rising Chip, Memory Costs - Apple (NASDAQ:AAPL)

Apple's iOS 18 and AI features could drive upgrades, with pricing strategies closely watched by investors. As Apple Inc AAPL prepares for its iPhone 16 launch on Monday, the biggest question on investors' minds is pricing. JPMorgan analyst Samik Chatterjee stresses that "pricing of iPhones to be a key watchpoint with premiumization expected for the less price-elastic high-end Pro models." While the base iPhone 16 and Plus models are expected to maintain their previous pricing at $799 and $899 respectively, the Pro models could see a price bump. According to Chatterjee, "We expect a staggered pricing approach with the new lineup, i.e., pricing being maintained for the more elastic base model and Plus model relative to iPhone 15 despite the inclusion of the AI features." The iPhone 16 Pro Max could range from $1,199 to $1,299, allowing Apple to offset rising costs tied to memory prices and the A18 processor chips. AI Features, iOS 18 Rollout Chatterjee also points out that the launch isn't just about hardware upgrades. Apple's next-gen iOS 18 and its integration with AI-driven features are equally critical. The release timing is another pivotal factor. Chatterjee adds, "We are looking for a release before the first half of October to enable consumers to try hands-on the features in the stores when evaluating purchases." This timeline could help Apple capture more consumer attention ahead of the holiday shopping season. AI capabilities in the iPhone 16 lineup are poised to drive consumer interest, with Chatterjee stating that "the iPhone 16 line up of phones will be the first designated AI iPhone," which could offer a compelling reason for consumers to upgrade. Read Also: iPhone 16 Could Kick Off 'Biggest Upgrade Cycle' In Apple's History, Says Dan Ives: Wedbush Analyst Predicts 'AI Revolution' Through Cupertino iPhone Users & Investors To Focus On Pricing Given Apple's history of hardware-driven events, this year's focus on AI could create new pricing dynamics. As Chatterjee notes, "The less price elastic demand for the Pro models will allow Apple the opportunity, in our view, to take pricing to pass through the incremental BOM costs." Investors will closely monitor how Apple handles potential price increases, especially with AI becoming a core feature. Pricing is expected to be a key focus for both users and investors at the upcoming product launch. Read Next: iPhone 16 Series Production Data Unveiled By Top Apple Analyst: 9M To 16M Units Shipments For August And September Expected Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

iPhone 16 Series Production Data Unveiled By Top Apple Analyst: 9M To 16M Units Shipments For August And September Expected - Apple (NASDAQ:AAPL)

Top analyst Ming-Chi Kuo has shared production data for Apple Inc.'s AAPL iPhone 16 series, providing details on shipment plans for the third and fourth quarters of 2024 and the first quarter of 2025. What Happened: In a blog post shared on Monday, Kuo revealed that the 2024 shipment forecast for the iPhone 16 series has been slightly raised from 87-88 million units to 88-89 million units, primarily due to increased demand for the standard iPhone 16. The iPhone 16 series, comprising the standard version, iPhone 16 Plus, iPhone 16 Pro, and iPhone 16 Pro Max, is projected to account for approximately 26%, 6%, 30%, and 38% of iPhone 16 series shipments in 2024, respectively. Shipments for August and September are expected to be around 9 million and 16 million units, respectively. Kuo estimates that Apple is preparing 15-17 million units for iPhone 16 pre-orders. See Also: Mark Cuban Explains Why, Despite Getting A Lot Of Flak From Elon Musk And Others, He Continues To Post On X: 'Don't Want to Be Where Everyone Agrees with Me' Meanwhile, in the third quarter of 2024 iPhone 16 series shipments are expected to grow about 10% YoY compared to the same period last year with iPhone 15 series. However, for the fourth-quarter 2024 iPhone 16 series shipments are projected to decline by 5-7% YoY compared to the same time last year iPhone 15 series. In the first quarter of 2025, iPhone 16 series shipments are expected to decline significantly by 53-55% QoQ, primarily due to seasonality and the potential cannibalization impact of the new iPhone SE4. Kuo also revealed that the only iPhone EMS providers are now Foxconn and Luxshare ICT, responsible for 55-60% and 40-45% of iPhone 16 series shipments, respectively. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Before the iPhone 16 launch, experts had mixed views. Gene Munster, a tech expert, suggested that the iPhone 16 launch could be a "disappointment before the excitement," as much of the anticipation was already factored into the stock. However, he believed the new phone would boost the stock over the next year. "I think it's conservative to say 10% because there's a group that's just going upgrade this year because it's time. Their phone is five years old they're just gonna get a new phone." On the other hand, Bloomberg columnist Mark Gurman cautioned consumers not to believe the hype about an iPhone 16 super cycle, stating that the "best AI features" would require a wait. Meanwhile, just days before the iPhone 16 launch, Huawei's new tri-fold smartphone, the Mate XT, received over a million orders in just seven hours, potentially raining on Apple's parade. Image via Shutterstock Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Apple iPhone 16 Event Not 'Sell The News,' Analyst Says: 'Shares Could Move Higher' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs