Update from 15.11. below. This post was originally published on November 12th
Apple rolled out global price increases for the iPhone 14 range, with only China and the US escaping the increases. Now a new iPhone 15 leak is claiming that the cost is going to rise a lot more, and it looks like no one is escaping the increases this time.
In a new tweet, popular anonymous industry insider LeaksApplePro has revealed that Apple’s widely available new flagship, the iPhone 15 Ultra, “will cost significantly more to manufacture than the iPhone 14 Pro Max.” While he doesn’t reveal how much that is, it opens the door for price increases across the range.
For those unfamiliar with the iPhone 15 Ultra, it’s expected to replace the Pro Max in Apple’s next line of iPhones. And “replace” is the crucial part of it.
Originally, the Ultra was billed as the fifth iPhone 15 model, a new hero device that showcases the best Apple can make. It’s a strategy that aligns with the company’s flagship iPad Pro and MacBook Pro ($2,000 and $6,100, respectively). Apple’s most powerful M1 chip is also called “Ultra”.
As more leaks revealed that the iPhone 15 Ultra is merely a rebranding exercise, fears of a big price hike subsided. 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 more straightforward than the X, XR, XS and Pro Max word salad of recent years. But not so fast.
Update 11/14: LeaksApplePro has provided more information about the increased manufacturing costs for the iPhone 15 Ultra. Speaking to me, the leaker says the new BOM will go up by as much as $100.
While this doesn’t sound “substantially more,” it’s important to remember that this is a cost to Apple, not the buyer. For comparison, last month Nike Asia The revealed iPhone 14 Pro Max components cost Apple $501, and prices for the smartphone start at $1099. However, it is too simplistic to say that $1 on the component cost adds $2 to the asking price.
“The A16 [iPhone 14 Pro] is $50 more expensive than the A15 [iPhone 14 and 13] manufacture,” explains LeaksApplePro, “but the Pro is still surprisingly priced at 999… Apple’s pricing policy is strange. If I had to guess, that might be a $150 increase (but that’s just a guess).”
Another factor is how Apple decides to price the iPhone 15 range internationally. With the iPhone 14 range, Apple effectively subsidized prices in the US and China by raising prices for the rest of the world – in some countries by up to 20%.
“It’s quite common,” notes LeaksApplePro, “when your costs go up, you make the ‘compliant’ market pay for the less compliant market, so everyone is happy.”
The problem is that this is unsustainable in the long term, making it all the more likely that the US and China will have to bear the increased costs for this generation. The silver lining? At least you still have enough time to save.
Update 11/15: LeaksApplePro contacted me with more information. The leaker highlights Apple’s next-gen A17 chip as a key factor, noting that it’s “certainly going to be more expensive.”
This is an interesting twist because 1st was the A16 of the iPhone 14 Pro twice as expensive how the A15 is used in the iPhone 13 and iPhone 14, and 2. The Business Daily News reported in September that Apple had declined a price increase for the chip from TSMC, its main chip supplier.
“Originally in the industry it was rumored that the price of TSMC would increase over the next year, between about 6% and 9% depending on the process, but later 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 the supply chain, Apple is pushing recognized last week, it is very likely that a compromise has been reached between both parties. While this issue is still impacting iPhone 14 Pro and Pro Max shipments, Apple warns, “We are now expecting lower iPhone 14 Pro and iPhone 14 Pro Max shipments than previously anticipated, and customers will experience longer wait times to get theirs.” to get new products.”
LeaksApplePro also highlights a second, more obvious factor: the move to a titanium chassis. Whether that happens remains to be seen, but as mentioned below, this is a material that’s 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% the weight, an important factor considering the iPhone 14 Pro Max is one of the heaviest slab phones in the world at 240g. Apple could also compromise and double the strength of the case while making the phone lighter than its predecessor. Something that would help sell the Ultra nickname.
Leaks surfaced last month that the iPhone 15 Ultra would have eye-catching upgrades like two front-facing cameras and a titanium body, a material about 35 times more expensive than the Pro Max’s stainless steel. So the latest information from LeaksApplePro is making a lot a lot of sense.
While increased manufacturing costs don’t always translate into price increases, be prepared if they cost “significantly more.” Apple needs to preserve margins. Additionally, the company has a clear pricing structure and it’s not a model that’s positioned way above the others – there’s always gradation. So if the UItra rises, the rest of the range has to close the gap to close it.
Yes, at a time of extreme inflation and a cost of living crisis, it comes as a shock to think that Apple will hike iPhone prices for the second straight year. Even US customers are now spending up to 15% more on average when buying iPhones. This is because the $899 iPhone 14 Plus replaced the $699 iPhone 13 Mini, making the $799 iPhone 14 the new entry point while their unconvincing upgrades pushed more customers to the pros.
So brace yourself for more iPhone price increases in 2023. The good news? At least it looks like you’ll get USB-C for that…