Introduction

Apple (AAPL.O) is gearing up to launch a slew of new products at its event scheduled for September 10th, igniting excitement among consumers and investors alike. With high expectations for the iPhone 17, experts also anticipate unveiling the Apple Watch Ultra 3, Apple Watch Series 11, and Apple Watch SE 3 in addition to the next-generation iPad Pro, Vision Pro, Apple TV 4K fourth generation, HomePod mini second generation, AirTag second generation, AirPods Pro 3, and Studio Display 2. However, beyond the expected announcements, a key point of focus lies in the pricing of these new offerings.

Overview of Expected Devices

Apple's upcoming event is rumored to showcase a diverse range of devices. Notable inclusions are the iPhone 17, expected to feature performance enhancements and feature upgrades. In addition, Apple may unveil new iterations of the Apple Watch, including the Apple Watch Ultra 3, Series 11, and SE 3, potentially featuring enhanced health capabilities and improved battery life. The next-generation iPad Pro is also rumored to feature an enhanced display and faster processor. Finally, the market is also anticipating new insights into the Vision Pro, Apple TV 4K fourth generation, HomePod mini second generation, AirTag second generation, AirPods Pro 3, and Studio Display 2, with expectations for upgrades and functional adjustments.

Potential Tariff Impact on Apple's Pricing

While Apple has previously navigated the threat of tariffs under the Trump administration, there are growing concerns about the potential impact of tariffs on Apple's product pricing. While smartphones have not yet seen significant price hikes, other consumer goods, such as apparel, footwear, and coffee, have experienced price increases due to rising tariff costs. Furthermore, some electronic products, most notably gaming consoles, have seen price increases due to tariffs.

Analyst Predictions for iPhone 17 Pricing

Several Wall Street analysts predict Apple will follow suit in raising prices, driven by the current economic conditions. Indeed, Jefferies analyst Edison Lee projects that the average selling price of the iPhone 17 will increase by $50. Similarly, Goldman Sachs suggests that future price increases could push average Apple device prices higher, as the company's mix is gradually shifting towards higher price points.

Potential Pricing Strategies

Historically, Apple has been cautious about adjusting the pricing of its devices. However, the company has strategically made pricing adjustments in the past in response to changing market conditions. For example, in 2020, Apple raised the price of its entry-level model from $699 to $829. Similarly, in 2022, Apple discontinued the $699 iPhone Mini and instead introduced the $899 Plus. In 2023, the company increased the starting price for the Pro Max from $1099 to $1199. In light of this, it is possible that Apple could employ various pricing strategies with the iPhone 17 lineup. For instance, Apple could employ an implicit price increase by removing entry-level models and forcing users to opt for higher storage versions at a premium. Alternatively, Apple could keep entry-level and Pro Max models prices the same while doing away with the entry-level Pro model, forcing users to pay for a higher storage version.

Impact of More Expensive Components on Pricing

Analysts predict the new iPhone will feature larger screens, more memory, and faster AI chips, increasing production costs. Nabila Popal, an analyst at IDC, has stated that even with higher component costs, Apple is unlikely to publicly attribute any price increases to tariffs. Instead, Apple is more likely to emphasize the functional upgrades of the new device while downplaying any price changes.

Conclusion

As Apple prepares to unveil its latest lineup of devices, consumers and investors are closely monitoring pricing. While Apple has previously successfully navigated the challenges posed by tariffs, there are growing concerns about the potential impact of tariffs on Apple's product pricing. Considering that Apple has a history of strategically adjusting pricing, it is possible that the company could employ various pricing strategies with the iPhone 17 lineup. Ultimately, a variety of factors, including tariffs, component costs, and market conditions, will play a role in Apple's pricing decisions.