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Apple’s first iPhone had a staggering price tag of $ 499 when it was introduced 14 years ago. That’s about $ 640 adjusted for inflation today.
The current iPhone 12 starts just a little higher – at $ 700 – but is a far cry from that first 4GB, 4.5-inch tall iPhone in 2007. The 12th iteration is over an inch tall. more with 16 times more memory. For 10% more money, iPhone customers get what they pay for.
The iPhone 12 is the most recent base model until Tuesday, when Apple is expected to announce a list of new products, including its next generation of iPhones. Apple hasn’t said how much the new version will cost – it’s still part of the enthusiasm for the company’s product launches.
Shareholders expect another big profit center. Apple stocks have significantly outperformed the S&P 500 over the past three months, rising more than 20%. Investors expect any new line of phones to be as successful as the 12 for Apple’s results. The company posted record revenues and profits in its first fiscal quarter thanks to the device.
The 13th version may be priced higher due to higher component prices. TSCM is the largest supplier of semiconductors for the iPhone, and it has reportedly increased its prices by up to 20%. Still, Apple watchers don’t expect the latest base version to represent a huge technological leap like other launches. This could limit price increases, as Apple has previously warned that supplies for the new devices will be limited.
Whether the newer iPhone increases in price or stays close to its newer parent, it will represent a quality fit if the expected improved display, faster processing, and better camera are included. It can be difficult for customers to place a value on these enhanced features, even if Apple raises the price.
Former Federal Reserve Chairman Alan Greenspan pointed this out when Nokia made the best-selling cell phone. “When the characteristics of products and services change rapidly… adjusting the price of an item to improve quality can be exceptionally difficult,” he said in 1998.
Capturing improvements in a product is much more difficult than looking at a higher price and reflexively seeing signs of inflation.
The new iPhones are expected to have the same 5.4-inch, 6.1-inch, and 6.7-inch screen sizes as last year’s iPhone 12, shown here. But the new devices will include camera upgrades.
Financial reporter Tom Hudson hosts “The Sunshine Economy” on WLRN-FM in Miami, where he is vice president of information. He is the former co-presenter and editor of the “Nightly Business Report” on public television. Follow him on Twitter @HudsonsView.
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