Apple’s pricing strategy

Apple has been shipping iPhones for 15 years. That means its pricing strategy is well-understood.

The launch of new models usually means a price cut for older models. Last year, Apple cut the price of all iPhone 12 models when the iPhone 13 was launched. The company didn’t break tradition this year. iPhone 13 now starts at $699 instead of $799. Meanwhile, the iPhone 13 mini starts at $599 instead of $699.

If you’re looking for a budget-friendly iPhone and don’t necessarily need the latest features, the iPhone 13 is ideal. This might be a good time to buy an older model.

However, if you’re willing to wait a few months you might be able to get a refurbished iPhone 14. Some of the devices bought this month could find their way back to Apple for repairs or upgrades in the near-future. These refurbished products are usually 15% cheaper and have a full year’s warranty.

If you’re looking for a bargain on the latest features, patience is key.

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The ‘tick-tock’ technique

Apple’s product cycle is also well-understood by industry experts. Software engineer Dan Hansen calls Apple’s product cycle the “tick-tock model.” Put simply, the company announces new phones every year but makes minor improvements the first year after launch (tick) leaving major upgrades and consequential new technology for the year after (tock).

2022 seems like a “tick” year for Apple. The iPhone 14 has only minor upgrades from its predecessor. In fact, some technology reporters called the latest upgrades “underwhelming.”

The industry expects a more noteworthy upgrade with the iPhone 15 which is due next year. The next generation phone could have a better camera and a new type of LTPO OLED display that lasts longer than its predecessor.

If you’re looking for a better reason to upgrade from your current phone it might be more prudent to wait until next September.

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Global supply chain

The global supply chain is yet to recover from the disruptions of the pandemic. China’s zero-tolerance Covid policies crimped production of everything from iPhones to electric vehicles. Meanwhile, a shortage of microchips compelled Apple to cut back on its production targets for this year.

Apple’s ability to release a new phone at the same price as the previous model is a testament to Tim Cook’s management prowess. However, the global supply chain hasn’t fully healed yet. Apple could find it easier to add new components to the next generation of its flagship device once production ramps up. That means iPhone 15 could have significant upgrades from this year’s model.

This is yet another reason for you to skip the current model and wait for the iPhone 15.

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About the Author

Vishesh Raisinghani

Vishesh Raisinghani

Freelancer

Vishesh Raisinghani is a freelance contributor at Money Wise.

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