Price Critical to IPhone 14 Sales; Premium Market Still Strong: Canalys

Price will have a major impact on market performance of the iPhone 14, due to be unveiled Wednesday during Apple’s 1 p.m. EDT event, Canalys emailed Tuesday. Higher component, materials and logistics costs are expected to result in more expensive iPhones, but “Apple has to be mindful of growing inflationary pressures on its consumers,” said analyst Le Xuan Chiew, saying Apple’s collaboration with channel partners “will be critical to improve affordability" for customers. At the same time, Chiew noted demand for premium smartphones is up, “with Apple continuously increasing its dominance.” Despite economic headwinds and overall shrinking demand for smartphones, “demand for premium smartphones is expected to remain strong," Chiew said. By model in first half 2022, the iPhone 13 had 42% share of the Apple global market; the 13 Pro Max and 13 Pro had 15% share each, Canalys said. “Apple’s effective countermeasures against macro-economic uncertainties drove iPhone shipments in H1 2022,” Chiew said, saying iPhone 13 shipments exceeded expectations. Chiew credited Apple’s decision to diversify production out of China into India with helping it "weather supply chain issues,” while investments in high-growth regions including Asia-Pacific and the Middle East helped the company navigate weakening global demand.