(CNN) — While Apple is expected to unveil the new iPhone 14 lineup at its upcoming event on Wednesday, there’s still a big question mark as to how much the tech giant will charge for the latest series of smartphones.
Apple has some famous customers for their loyalty. However, with broader economic forecasts downgraded everywhere, it could be a tough time convincing people to upgrade their iPhones.
“Apple is facing a real pricing dilemma,” said Ben Wood, chief analyst at market research firm CCS Insight. In addition to inflation and cost-of-living pressures wreaking havoc on consumers, he noted that Apple is simultaneously facing rising costs associated with iPhone components and transportation.
“My expectation is that Apple probably has to raise prices,” Wood told CNN Business. But given the stress consumers are facing, he believes Apple will also do “everything it can to keep that to a minimum.”
Beyond broader signs of a worsening economy, Apple also faces other hurdles as it gears up for a product launch next week. Supply chain setbacks stemming from China’s “Covid Zero” policy were partly related to the company’s 11% year-on-year drop in quarterly profit, reported last month. However, Apple CEO Tim Cook said on the earnings call that there was “no obvious evidence of macroeconomic impact” on iPhone sales. Cook added that the company even set a third-quarter record “for both revenue and number of users switching to iPhone,” adding that “customers continue to view iPhone as the gold standard for smartphones.” .
Steady iPhone sales have in part to do with predictions by some industry insiders that Apple will raise the price of its new iPhones, though it’s hard to predict by how much.
Ming-Chi Kuo, an influential Apple analyst based in Asia, tweeted earlier this month that he expects Apple to increase the average selling price of the iPhone 14 line by about 15% compared to the iPhone 13 line. (Currently, the regular, non-mini iPhone 13 starts at $ 799, the iPhone 13 Pro at $999, and the iPhone 13 Pro Max at $1,099).
In a research note published Monday, Wedbush Securities analysts Dan Ives and John Katsingris predicted that Apple would increase the price of its new high-end models by about $100. $100 off the price of the iPhone 14 Pro/Pro Max, given increased component prices as well as added functionality in this new release.” Rumors say that the cameras of the next iPhone Pro models will be improved to possibly justify the price increase, among other improvements.
Wedbush analysts also predicted strong underlying demand for the next iPhone, estimating that some 240 million of the world’s billion iPhone users haven’t upgraded their phones in more than three and a half years.
Wood also noted that Apple’s iPhones are somewhat insulated from macroeconomic pressures. Additionally, consumers increasingly view smartphones as “almost essential” compared to other tech gadgets. “Whether you really need an iPhone or not is something that can be questioned, but people who already have an iPhone are incredibly loyal,” Wood said.
“I think Apple has some advantages over its rivals,” he added. “There are people who are always waiting for a new iPhone.”
Apple, famously tight-lipped in the run-up to its product launches, did not respond to CNN Business’ request for comment on the latest iPhone prices. The company last week sent out invitations for its September 7 event, which has been cryptically dubbed “Far out.”
The event will be broadcast on Apple’s website from the company’s headquarters in Cupertino, California beginning at 1:00 pm ET.