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Apple’s iPhone 14 Pro is a huge hit. But what’s really propelling its success?

September 26, 2022, 5:05 PM UTC
Justin Sullivan/Getty Images

With regard to the latest line of iPhones, it’s clear that global consumers are pro-Pro.

As the Apple iPhone 14 flies off the proverbial shelves following its mid-September release, multiple data points show that buyers are gravitating toward the more-expensive Pro ($999 in the U.S.) and Pro Max ($1,099) versions of the smartphone, shunning a base model ($899) that’s been widely panned as uninspiring.

In a research note last week, Evercore ISI analyst Amit Daryanani estimated that about 56% of iPhone 14 buyers planned to purchase a Pro or Pro Max model, up from 41% during last year’s rollout of the iPhone 13.

The projection mirrored one from TF International Securities analyst and Apple guru Ming-Chi Kuo, who predicted that iPhone 14 Pro models will account for 60-65% of the line’s shipments in the second half of 2022.

The Financial Times also reported Monday that Counterpoint Research forecasts the average selling price of an iPhone will hit $944 in the fourth quarter of 2022, up from $873 during the same period last year, because of customers opting for the Pro model. Prices for the iPhone 13 and 14 series were essentially unchanged at the time of their respective releases.

The preference for the higher-priced Pro is undoubtedly a win for Apple, provided that unit sales remain consistent. Multiple analysts expect Apple will move a similar number of new iPhones in the latter half of 2022 when compared to the prior year—and might even exceed that total.

What exactly that means long-term for Apple, however, is a bit convoluted.

Conventional wisdom would suggest that Apple is discovering the iPhone’s price elasticity is even better than originally thought. 

Despite generationally high inflation and a general economic malaise, iPhone buyers are showing they’re willing to pony up if they see better value in an Apple smartphone. The iPhone 14 Pro contains several added features that aren’t in the base model, including the Dynamic Island module, an always-on screen, and a better camera. The base model, meanwhile, received minimal upgrades over last year’s iteration.

But there are other confounding factors that might be contributing to demand for the Pro version, making it difficult to draw lessons from its apparent success.

AT&T, Verizon, and T-Mobile have been particularly aggressive this year in offering trade-in deals for the iPhone 14, allowing customers to get an iPhone 14 Pro or Pro Max for minimal money. In some cases, customers can get the top-of-the-line phones for free, provided they have the right trade-in and sign up for specific wireless plans.

The competitive trade-in offerings are designed to lock customers into each wireless provider’s new 5G network, which cost those companies massive sums of money to set up.

“The aggregate promotions are a significant positive for Apple,” Daryanani said in a client note last week, according to Investor’s Business Daily. “These actions act as an underappreciated lever that could ease price points for consumers and support a strong iPhone cycle.”

Apple also might be hitting customers at just the right time in their smartphone renewal cycle, providing a slightly artificial boost to the iPhone 14 line. 

Wedbush Securities analyst Dan Ives estimates that about 240 million out of the 1 billion iPhones in circulation are at least 3 ½ years old, as customers hang on to their devices longer. With wireless carriers offering deep discounts on iPhones, consumers clinging to their aging hardware might be using the iPhone 14 as an opportunity to upgrade on the cheap.

Even if the iPhone 14 Pro’s success is truly rooted in a willingness to splurge on $1,000 phones, Apple’s runway for building on this triumph could be short. As Bloomberg reported in March, Apple is working on a hardware subscription service that would treat iPhones more like a leased device, rather than a purchased product. The approach likely would involve Apple bundling new iPhones with some of subscription services, such as Apple Music, Apple Fitness+, and iCloud+.

For Apple, there’s no real downside to millions of customers increasingly opting for a higher-priced product. It’s just too early to conclude whether the iPhone 14 Pro’s prosperity is a phenomenon, a product of circumstances, or a prevailing trend.

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Jacob Carpenter


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