The premium iPhone range is Apple’s shield against declining sales

The premium iPhone range is Apple’s shield against declining sales
The premium iPhone range is Apple’s shield against declining sales

The company is expected to unveil the iPhone 14 series during a tech event on Wednesday

iPhone 13 of the American technology company Apple Inc. Photo: Jonathan Cherry/Bloomberg

The most expensive smartphones of Apple Inc. will be in focus on Wednesday, when the company is expected to unveil the iPhone 14 lineup amid a global slowdown in sales of everything except premium gadgets, the Wall Street Journal reports.

The company’s Pro models — the 6.1-inch and 6.7-inch display versions — have helped Apple post record sales and profits over the past two years since the tech giant unveiled its first 5G offerings in late 2020.

Those versions, which start at $200 above the base models, are poised to get some of the most notable upgrades in a cycle that’s expected to be more evolutionary than revolutionary for the iPhone.

Apple’s first in-person product event since Covid-19 reshaped modern life will feature journalists at the company’s headquarters in Cupertino, California, and will be broadcast via its website.

The question for many investors is how long demand — which is at a record high — for the iPhone can last amid uncertainty surrounding the economy and rising prices.

“Globally, 5G penetration is still low,” CEO Tim Cook told analysts in July. “And so I think there is reason to be optimistic,” he added.

Apple has so far bucked an industry-wide decline in smartphone shipments, which fell nearly 9 percent in the latest quarter from a year earlier, International Data Corp. estimates show. In the first half of the year, it was premium smartphones that provided some relief, says Counterpoint Research.

Since the arrival of 5G phones in late 2020, US buyers have invested more in an iPhone purchase. Average selling prices for iPhones rose to $954 in the second quarter, compared to $783 in the third quarter of 2019, when the iPhone 11 was introduced, according to a consumer survey by Consumer Intelligence Research Partners.

That’s because more buyers are opting for the more expensive Pro models and spending more to add more storage to the device.

The iPhone 13 Pro comes with 128GB of memory, which can be increased to 250GB for an additional $100. For an additional 500, buyers can get 1TB.

More than 50 percent of iPhone buyers upgraded storage in the 12 months to the end of June, according to Consumer Intelligence Research Partners, compared with less than 40 percent in 2019.

“In recent years, this phone mix has become increasingly premium,” commented Josh Lovitz, co-founder of Consumer Intelligence Research Partners. “It was not expected for me,” he adds.

Sustaining sales of premium smartphones could help Apple boost revenue even if the pace of sales slows or stagnates next fiscal year. According to FactSet data, 5G phones are fueling projected growth of 27% for fiscal 2021.

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