JPMorgan analyst: Apple's iPhone 14/Pro price increases but will still sell well

Apple has announced that it will hold a "Far Out" special event at 1:00 am Beijing time on September 8. This time, the online conference is still used, and it is expected to bring new products such as the iPhone 14 / Pro series, Apple Watch Series 8, and the official version of iOS 16.

Investment bank JPMorgan has told investors that the current economic situation means that pricing will be key, but "discretionary purchases" like the Apple Watch will be affected more than the iPhone 14 series.

It was previously rumored that the price of the iPhone 14 standard version will remain the same as the iPhone 13, but the price of the iPhone 14 Pro model will increase.

Investment bank JPMorgan Chase said it's still possible that all iPhone 14 series prices will rise, but the Pro models will definitely be more expensive.

"With inflationary pressures across the supply chain, prices for the iPhone 14 lineup are widely expected to rise relative to the iPhone 13," said JPMorgan analysts. "We expect Apple may take a more granular approach, maintaining low-end iPhone 14 and iPhone 14 Max pricing, while increasing iPhone 14 Pro and iPhone 14 Pro Max pricing.”

JPMorgan believes the iPhone 14 series will still sell well, but that could mean Apple needs to emphasize options like its BNPL (buy now, pay later) service.

"Strong trade-in prices and a broader buy now, pay later promotion can drive strong sales. Apple offers trade-in prices of $25 to $600, and we expect strong trade-in offers to continue."

"Additionally, there are many credit card-based installment options, but the average consumer is still unaware of the BNPL program," the JPMorgan analysts wrote. "We expect a wider rollout of BNPL, as well as increased consumer awareness that it can help convert users and Upgrade users."

However, JPMorgan believes that economic pressures are more likely to hurt sales of the Apple Watch Series 8 and the expected high-end Apple Watch Pro.

"Pricing is a key observation in a tough macro [economy] that includes inflationary pressures and a pullback in consumer spending," JPMorgan said, "but we think wearables are seen as more of wearable than the iPhone. Discretionary purchase of equipment, pricing is more important to consumers.”

In addition, the Apple Watch Pro is expected to start at $900.

JPMorgan also noted that Apple's stock price would be "modestly risked" in the long run if CEO Tim Cook leaves the company. However, the risk is "significantly lower than in the past" and "we see a strong group of executives who can support business performance without disruption."

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