This post was originally published on this site
While Apple Inc.’s decision to keep iPhone prices steady in the U.S. is notable, the company made a variety of pricing changes in international markets that could affect its business.
JPMorgan’s Samik Chatterjee writes Apple
AAPL,
took a “favorable” approach to iPhone 14 pricing in China, though less so in European markets.
He noted that Apple increased iPhone 14 prices by a low-single-digit rate in China relative to iPhone 13 prices, whereas the Chinese yuan has depreciated roughly 7% in the same span. In Europe, pricing for the iPhone 14 in Germany and the U.K. is up by mid-teens for Pro models, in line with the euro and the pound’s depreciation, though Apple’s increases are slightly less steep for base-level iPhone models.
“Net, the pricing strategy from Apple for the iPhone 14 series line up is not only favorable in the U.S. market, but also in China, while the pricing strategy for the European markets is less accommodative,” Chatterjee wrote. “The favorable pricing strategy in China will be key to supporting market share gains, following strong performance with iPhone 12 & 13.”
Read: Should you buy a new Apple Watch? The Ultra, Series 8 and SE can be preordered now
Greater China represented about 18% of Apple’s total revenue in the most recent quarter, while Europe accounted for roughly 23%. International revenue on the whole represented about 55% of the company’s total.
Apple’s international pricing strategy has been somewhat less digested than its U.S. approach, which saw the company hold steady with iPhone 14 prices relative to the iPhone 13 line, a move seen as beneficial for demand trends given inflationary pressures on consumers.
Read: Apple won’t raise iPhone 14 prices as it battles with a fierce rival
Chatterjee also weighed in on the state of wireless promotions ushered in by U.S. carriers. While there were various puts and takes in this year’s set of deals, he deemed them “equally robust” to those offered in the iPhone 13 cycle, though he noted that trade-in values for iPhone 13 devices have come down relative to what iPhone 12 trade-in values were last year.
Don’t miss: Here are the iPhone 14 deals from AT&T, T-Mobile, and Verizon as preorders begin
“Net, we see a less favorable trade-in backdrop as modestly less supportive of replacement demand for iPhone 14 while robust promotions continue to encourage switchers – also helping Apple in relation to installed base increases,” he wrote.
