Apple is readying a new line of iPhones with a focus on bigger screens and higher prices

Apple Inc. is preparing to unveil its new line of iPhones at an event on September 7.

The iPhone 14 lineup is expected to include four models: a standard and Pro version at 6.1 inches and a Max and Pro Max version at 6.7 inches each. High-end models are expected to cost $100 more than the 2021 lineup. The standard iPhone 13 started at $799, while the iPhone 13 Pro Max started at $1,099.

While the macro issues gripping the tech world are also expected to weigh on Apple, analysts believe there’s enough pent-up consumer demand to upgrade their devices to pave the way for the iPhone 14 to become another resounding success for the company.

“Apple’s growth story remains well intact with clear momentum around the iPhone 14 around the corner despite the shaky macro,” Wedbush analyst Dan Ives said in a research note. .

Anticipation around the phone has impacted Apple stock, which has risen more than 15% in the past two months. Year-to-date, the company’s shares have consistently outperformed the technology-heavy Nasdaq index.

Changes for iPhone 14

The new iPhone 14 lineup is expected to ditch the notch at the top of the display in favor of a punch-hole for the front camera and Face ID system. This change would allow for a more useful status bar at the top of the screen, said Ken Hyers, director of emerging device strategies at Strategy Analytics.

However, the biggest decision Apple is expected to make with the iPhone 14 lineup is to include the current-gen A15 Bionic chipset in the base model of the phone, while reserving the new A16 chip for higher-end Pro models. Hyers said.

While not upgrading a new iPhone’s processor would be a first for Apple, the move would allow the company to alleviate supply chain issues while reducing BOM costs.

“This is a very smart move on Apple’s part, as keeping the A15 chip should ease the supply issues that typically plague the company in the second half of the year when it introduces a new iPhone model,” Hyers said.

Apple is likely to skip a mini version of the iPhone 14 due to anemic sales of earlier models, said Angelo Zino, senior equity analyst at CFRA Research.

“After the absolutely dismal sales of previous mini versions, Apple is increasingly emphasizing larger screens that possess higher price points,” Zino said. “Dropping the mini from the iPhone line in favor of the Max will naturally increase the average selling price on Apple’s platform.”

Sales sweetening

The second quarter was marked by issues that weighed on device sales worldwide. Component shortages continued to persist, while macro factors such as exchange rate headwinds led to lower overall consumer demand.

Despite its market dominance, Apple was not immune to the pressures and saw its total second-quarter product shipments decline 1.1% year-over-year, according to Kagan estimates. a media research group within S&P Global Market Intelligence.

While every Apple product segment Kagan tracked was either flat or down year-over-year, iPhone shipments still managed to rise 5% to 47.5 million in the second quarter.

Apple reported net iPhone sales of $40.67 billion in the June quarter, up 2.8% year-over-year. However, the growth rate was significantly lower than the 49.8% recorded in the year-ago quarter.

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Looking forward

Wedbush predicted that Apple placed an initial order of 90 million iPhone 14 units, roughly flat on the iPhone 13.

“While the softer macro will clearly play a role in the demand story, we believe the baseline for 220 million iPhone units in FY23 is likely a low bar given the story of the pent-up demand we’re seeing globally for Apple,” Ives said.

CFRA forecasts sales growth of between 0% and 3% for iPhones in the fiscal year ending September 2023, driven primarily by macroeconomic uncertainty and headwinds weighing on the smartphone space. However, the company also estimated that the average selling price for the next cycle would increase by around 3%, due to expected price increases for high-end phones.

“We see an opportunity for Apple to increase the price of its two high-end Pro devices, given the greater upgrade capabilities this device offers over previous generations, coupled with the natural inflationary environment that would make such a decision acceptable to consumers,” Zino said.

Given the tougher macro backdrop, Zino thinks Apple raising the price of its standard iPhone is unlikely.

apple watch

Apple is also expected to unveil new Apple Watch models at the September 7 event. The new Series 8 watch won’t have major aesthetic changes but will have minor updates to internals, including a new “S8” chip, Zino said.

At the low end, Apple will provide minor updates to the Apple Watch SE, and the company is expected to announce that it will no longer sell the low-cost Series 3 watch, according to the analyst.

“This natural move should help boost the Apple Watch’s average retail price as well as the company’s intention to unveil a new premium watch,” Zino said.

The new top model will likely target extreme sports enthusiasts with a bigger screen, longer battery life and a more shock-resistant display.

“Assuming this device will go on sale for $800 or more, we expect unit sales and demand for the product to be minimal,” Zino said.

New versions of the iPad tablet are expected to be announced in October. Apple’s new augmented and virtual reality headsets are not expected to show up at the September event.

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