The new Apple exclusive reveals the price shock of the iPhone 15

Updated 11/15 below. This post was originally published on November 12th

Apple has introduced global price hikes for the iPhone 14 range, with only China and the United States escaping the hikes. Now a new iPhone 15 loses claims costs are rising a lot more and it looks like no one will escape the increases this time around.

In a new tweet, popular anonymous insider of the industry Leaks ApplePro revealed that Apple’s new, widely leaked flagship, the iPhone 15 Ultra, “will cost substantially more to manufacture than the iPhone 14 Pro Max.” While it doesn’t reveal how much it is, it opens the door to price hikes across the range.

For those unfamiliar with the iPhone 15 Ultra, it should replace the Pro Max in Apple’s next iPhone line. And “replace” is the critical part of that.

Initially, the Ultra was considered a fifth model of the iPhone 15, a new hero device that shows the best Apple can do. It’s a strategy that fits the company’s flagship models iPad Pro and MacBook Pro at most ($ 2000 and $ 6100 respectively). Apple’s best performing M1 chip is also called “Ultra”.

Update 11/14: LeaksApplePro has provided more information on the increase in production costs for the iPhone 15 Ultra. Speaking to me, the leaker says the new BOM will increase to $ 100.

While this may not seem “substantially more”, it is important to remember that this is the cost to Apple, not the buyer. For comparison, last month Nikkei Asia revealed that the components of the iPhone 14 Pro Max cost Apple $ 501 and the price for the smartphone starts at $ 1099. That said, it is overly simplistic to say that $ 1 on component costs equals $ 2 added to the asking price.

“The A16 [iPhone 14 Pro] it costs $ 50 more than the A15 [iPhone 14 and 13] to produce, “explains LeaksApplePro” but the price for the Pro is still surprisingly at 999 … Apple’s pricing policies are weird. If I had to guess, maybe that would be a $ 150 raise (but that’s just a guess). “

Another factor is how Apple decides to value the iPhone 15 range internationally. With the iPhone 14 line, Apple has effectively subsidized prices in the US and China by raising prices for the rest of the world, in some countries up to 20%.

“It’s pretty common,” LeaksApplePro notes, “If your costs go up, make the” compliant “market pay the less compliant, so everyone is happy.”

The problem is that this is unsustainable in the long run, which makes it even more likely that the US and China will have to bear the rising costs for this generation. The silver lining? At least you still have plenty of time to spare.

Update 11/15: LeaksApplePro contacted me with more information. The leaker highlights Apple’s next-generation A17 chip as an important factor, noting that “it will definitely be more expensive”.

This is an interesting twist because 1. The iPhone 14 Pro’s A16 was twice as expensive like the A15 used in the iPhone 13 and iPhone 14 and 2. The Daily economic news reported in September that Apple had rejected a price increase for the chip from TSMC, its main chip supplier.

“Initially, the industry was rumored that the price of TSMC would rise next year, varying from around 6% to 9% according to the process, but later there were rumors 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 pressures on Apple’s supply chain recognized last week, there is every possibility that a compromise has been reached between the two sides. This issue continues to affect iPhone 14 Pro and Pro Max shipments, however, with Apple’s warning: “We now expect iPhone 14 Pro and iPhone 14 Pro Max shipments lower than previously expected and customers will experience lead times. wait longer to receive their new products. “

LeaksApplePro also highlights a second more obvious factor: the move to a titanium chassis. Whether that will happen remains to be seen, but as mentioned below, this is a material 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% by weight, a significant factor when, at 240g, the iPhone 14 Pro Max is one of the heaviest slab phones in the world. Apple could also compromise and double the strength of the chassis by making the phone lighter than its predecessor. Something that would help sell the nickname “Ultra”.

Last month, reports surfaced that the iPhone 15 Ultra would have mind-boggling upgrades like dual front cameras and a titanium chassis, a material that’s about 35 times more expensive than the Pro Max’s stainless steel. LeaksApplePro make a lot of sense.

While rising production costs don’t always lead to price increases, you should be prepared when they cost “substantially more”. Apple has margins to preserve. In addition, the company has a clear pricing structure and does not expect a model that is positioned far above the others – there are always increases. So if the UItra goes up, the rest of the range will have to close the gap to meet it.

Yes, in a time of extreme inflation and cost-of-living crises, it’s a shock to think that Apple will raise iPhone prices for the second consecutive year. US customers now also spend up to 15% more on average on iPhone purchases. That’s because the $ 899 iPhone 14 Plus replaced the $ 699 iPhone 13 Mini, so the $ 799 iPhone 14 became the new entry point, while their overwhelming upgrades pushed more customers to the pros.

So get ready for more iPhone price hikes in 2023. The good news? At least it looks like you’ll get USB-C in return …

MORE FROM FORBESApple supplier confirms iPhone 15 component plans

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