Amid rampant inflation in the US, Apple is raising prices on some services, but the price of the iPhone has remained the same, putting the company on track for the lowest iPhone gross margin in all of the past. four years. For Apple’s future, the expansion of gross profit from services is increasingly important.
Adam Levy for The Motley Fool:
The cost of everything has risen in the past year due to inflation and the iPhone is no different. Estimates indicate that the BOM for the iPhone 14 Pro Max was 20% higher than that of the 13 Pro Max. The cost of all the components found within that small glass rectangle totaled nearly 46% of the price. requested by Apple this year. This is the higher cost of the material than the price Apple paid for any Max model.
Instead of passing the cost increase on to consumers, Apple has decided to keep the price of all its iPhone models the same. With competitors rising prices and rampant inflation, it means Apple has made its iPhones much more attractive in terms of price.
Just a few years ago Apple TV + was seen as a smart way to incentivize new iPhone purchases … But the recent price hike indicates that Apple is serious about making the streaming service a profitable endeavor. It is making major licensing deals with sports leagues and its prestigious original content is starting to gain ground with a large audience.
MacDailyNews takes: The more Macs, iPads, and iPhones it has in users’ hands, the better Apple sells its most profitable and fast-growing segment, services.
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