Will iPhone 14 Pro models Appeal to Upscale Shoppers? The Bet Apple Is Banking On | Mobile News

Will iPhone 14 Pro models Appeal to Upscale Shoppers? The Bet Apple Is Banking On

The latest iPhone hits stores Friday, and Apple Inc. is counting on well-heeled shoppers to make the device, the iPhone 14 Pro models specifically, a hit during a year of roaring inflation and shaky technology spending.

By:BLOOMBERG
| Updated on: Sep 16 2022, 18:59 IST
iPhone 14 Pro in photos: First look at this revolutionary design
iPhone 14
1/5 The iPhone 14 Pro has a 6.1-inch Super XDR OLED display. The iPhone 14 Pro also has Apple’s ProMotion display technology offering 120Hz refresh rate, the highest refresh rate ever seen in an iPhone. Apple promises up to 2000 nits of peak brightness. (Apple)
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2/5 For the first time since the launch of iPhone X, Apple has heavily revamped the design of the iPhone. The iPhone 14 Pro features an all-new notch with a punch hole and pill shaped cutout in front housing all the sensors as well as the front camera. (Apple)
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3/5 The iPhone 14 Pro is powered by Apple’s new A16 Bionic chipset which offers blazing fast performance while maintaining high energy efficiency. Last year’s A15 Bionic was already the fastest processor in the market and the new 4nm A16 Bionic will strengthen iPhone’s position as the fastest smartphone in the market yet. (Apple)
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4/5 The iPhone 14 Pro has a brand new 48MP main camera with a 65% larger sensor than iPhone 13 Pro. The iPhone 14 Pro also features Apple's enhanced Sensor Shift OIS with 24mm focus length. Professional photographers can take advantage of the ability to shoot 48MP ProRAW images. (Apple)
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5/5 The price of the iPhone 14 Pro starts at $999 for the base 128GB variant. The 128GB variant is priced at $1,099 while the 512GB variant has been priced at $1,299. For those who want the maximum capacity to shoot ProRAW images, you can get the colossal 1TB variant priced at $1,499. (Apple)
iPhone 14
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Apple launched the iPhone 14 on September 7 at its “Far out” event held at the Steve Jobs Theater in Apple Park, California (REUTERS)

The latest iPhone hits stores Friday, and Apple Inc. is counting on well-heeled shoppers to make the device, the iPhone 14 Pro models specifically, a hit during a year of roaring inflation and shaky technology spending.

The iPhone 14 lineup reserves the best features for the high-end iPhone 14 Pro models costing at least $1,000. And based on preorder data, the strategy is already working with consumers, who have turned the most expensive new iPhone into the most popular version.

More about Apple iPhone 14 Pro
Apple iPhone 14 Pro
  • Gold
  • 6 GB RAM
  • 128 GB Storage
See full Specifications

Though overall spending on mobile devices and computers is slowing this year, there's still an appetite for top-tier smartphones -- Apple's strength. That's allowed the company to hold production steady at a time when much of the industry is scaling back plans.

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“The data continues to point to robust demand for the iPhone 14 Pro and Pro Max, which could have a materially positive impact for both mix and margins,” Amit Daryanani, an analyst at Evercore ISI, said in a report this week.

The iPhone 14 line was unveiled earlier this month alongside new Apple Watches and AirPods. The company didn't raise prices, a surprise to analysts who thought inflationary pressure would force the move. But Apple is still attempting to upsell consumers more than ever before.

The standard iPhone, which starts at $799, doesn't even run Apple's latest processor, the A16. Instead, it uses the same A15 chip as last year, with the A16 going into the Pro models. The Pro phones also get significant camera improvements and a new interface called the Dynamic Island.

That's left users with less reason to upgrade to a basic iPhone 14, but plenty of incentive to pay a little more for the Pro. A flurry of carrier promotions and trade-in offers also may coax consumers into buying a glitzier model.

Apple reshuffled its display configurations this year as well. Gone is the mini version of the iPhone. Instead, the company is betting that consumers want more screen real estate. The non-Pro iPhone 14 will come in a 6.1-inch model and a 6.7-inch Plus version that won't be available until Oct. 7.

The preorder data suggests the iPhone 14 Pro Max is more in demand than the same model was last year, part of the shift upscale, according to a report by KGI Securities.

The question now is whether that momentum is strong enough for Apple to overcome a broader slump. Worldwide the smartphone market is expected to decline 3.5% to 1.31 billion units this year, according to market research firm IDC.

In China, both a manufacturing hub for Apple and a key market, smartphone sales have tumbled this year. But Apple shipments are up 5% compared with an overall decline of 23%, according to Evercore ISI's Daryanani.

“Apple continues to gain significant share in China and we expect the share gains to continue,” he said.

A successful iPhone 14 launch could help ease investor jitters after a roller coaster of a month. The stock has whipsawed between gains and losses in recent trading sessions, with the shares suffering their worst single-day rout since 2020 on Tuesday. A higher-than-expected inflation report and concerns about interest rate hikes have hit tech stocks especially hard.

Apple shares are down 14% for the year, though that's a bit better than the S&P 500, which has fallen 18%. The tech-heavy Nasdaq Composite Index has tumbled 26%.

Analysts expect Apple sales to tick up 6% this quarter, a deceleration from the 29% gain it saw a year earlier -- when pandemic-bound consumers were still snapping up technology. The iPhone 14 is coming out a couple weeks earlier in the year than usual, which should help shore up Apple's revenue in the September quarter. The company's biggest sales period of the year is usually the December quarter, lifted by holiday spending. Sales in that period are expected to gain 3%, according to analysts' estimates.

The iPhone is unrivaled among Apple's products in its importance. It provides about half of the company's total revenue and helps spur sales of other devices, including the Apple Watch and AirPods. Both of those categories got makeovers during the recent launch, further spotlighting the company's high-end focus.

The company unveiled a update of the AirPods Pro and a first-ever Apple Watch Ultra model, which -- like the Pro iPhones -- is designed to be both bigger and better. And, of course, it will cost a bit more.

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First Published Date: 16 Sep, 18:59 IST
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