Apple‘s latest earnings call revealed record earnings for the first quarter of this year, but predict some not-quite-so-great news for later on in the year. Due to a number of factors, Apple is preparing for a dip in its external profits.
Tim Cook pegged this expected shortfall to the current chip shortage, COVID lockdowns in China, inflation, falling exchange rates, and pulling out of Russia. And unfortunately, it looks like it’s set to hit consumers to when the upcoming iPhone 14 is released.
But what’s all this got to do with me and iPhone 14?
Chris Caso, a reputable analyst, warned that Apple may need to increase local prices for iPhone 14. According to Caso, if exchange rates continue to fall, Apple is considering increasing prices outside of the US. This will help to stop the company taking a hit from lower dollar amounts after conversion. Good news for Apple, not so good news for anyone else.
iPhones are often more expensive overseas due to import duties and added taxes. Although some US states have sales tax, those in countries like the UK are typically much higher: 20% in the UK compared to 7.25% in California and just 2.9% in Colorado. With the US dollar strengthening, Apple will ‘rebalance’ exchange rates accordingly, leading to higher prices in the UK and elsewhere, even if the iPhone 14’s US price remains static.
iPhone 14 is likely Apple’s next main product launch this year (besides a couple of Macs in summer, maybe). By the time any knock-on effects hit Apple, it’ll be time to tune back in to Apple Park for the September event. It’s down to poor timing more than anything else.
Apple hasn’t actually increased its iPhone prices for a while. The latest 13 Pro series launched at the same price point as the iPhone 11 Pro series in the US, and actually slightly cheaper in the UK. iPhones usually increase in price when Apple updates the feature set, so we may have been due a price hike anyway.
Just remember that the global situation may change, so Apple may no longer need to increase iPhone 14 prices outside of the US. We’ll just have to wait and see what happens come September.
Updated 3 May to clarify statement on UK/Europe prices and sales tax.