APPLE STOCK

iPhone 14 Pro sales driven by long refresh cycles and carrier deals


It’s clear from the increasing shipping delays and lack of in-store availability that iPhone 14 Pro sales are extremely high, compared to those of the base model iPhone 14. We already know one reason for this, but analysts suggest two further factors are at play .

This year’s iPhone launch is unusual for two reasons. First, only the Pro models get the latest processor – although this is probably not a major draw for many…

More significantly, perhaps the most exciting development for many would have been the iPhone 14 Plus, which for the first time offers the largest screen size to those who don’t need the Pro features. However, at just $100 more for the smaller Pro, or $200 for the Pro Max, it becomes a tighter contest.

Added to that, for someone upgrading from the iPhone 12 or iPhone 13, the base model iPhone 14 is a relatively modest upgrade.

“In terms of the base [iPhone 14] compared to the price points, it’s just too compelling to do [iPhone 14 Pro],” said Dan Ives, managing editor of equity research at Wedbush Securities.

This echoes what most reviewers have said.

There’s a very consistent theme to the base model iPhone 14 reviews: It’s not good enough to justify paying $100 more than the (now) $699 iPhone 13. If you want a new phone this year, spend the extra on the iPhone 14 Pro.

Ive says that with many iPhone owners now upgrading only every three years or more, they expect to see significant benefits, reports CNET.

Around 240 million of the 1 billion iPhones have been in their owners’ hands for three and a half years or more, according to Ives’ research, and those people may upgrade.

When they do, they’re less likely to pick the baseline iPhone 14. There’s not much new about the iPhone 13 released last year or the iPhone 12 in 2020.

There’s a third factor. While the Pro models are expensive, carrier “subsidies” (aka deferred payments) are back in fashion.

“The carrier discounts and promotions are significant,” says Ives. With $800 to $1,000 off new iPhones, carriers are incentivizing consumers to opt for pricier Pro and Pro Max phones.

Consumers don’t feel the price difference between the $800 iPhone 14 and $1,000 iPhone 14 Pro thanks to [these] promotions.

Bloomberg reports the same thing.

“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 […]

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 may also coax consumers into buying a glitzier model.

Some believe that Apple has been taken by surprise by the level of demand for the pricier models.

The dominance of the iPhone 14 Pro and Pro Max may have surprised even Apple, as pre-orders for the higher-tier phones now list delivery windows into mid- and late October. While reports indicate Apple ordered 90 million iPhone 14 series phones for the holiday quarter, which is on par with how many iPhone 13 series phones it shipped last year for the same period, the spike in preorders for the Pro and Pro Max models could mean Apple has to increase its orders for the holidays.

Strong iPhone 14 Pro sales have been reflected in some people seeing their shipping dates slip – in the worst of cases, by several weeks. Apple is normally conservative with delivery dates, so we’re used to seeing Apple bring dates forward, not set them back.

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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