How a Shift in iPhone Price Could Shape the Smartphone Industry Amidst Chip Shortage
In Focus
- Apple expects demand for iPhone 17 to surge
- The company can use its influence to secure memory chips from leading suppliers
- Android smartphone makers are monitoring Apple’s iPhone pricing decision
Concerns over whether Apple will increase iPhone prices or maintain the current ones to attract new customers have emerged. According to Yahoo Finance, concerns about iPhone price increase have been triggered by the ongoing global memory chip shortage.
Apple Maintains Silence Over iPhone Pricing
Last week, Apple gave a strong sales outlook driven by surging demand for iPhone 17 models. The tech giant said it expected a sharp rise in global chip pricing, but did not comment on whether iPhone prices would be affected.
Apple did not say whether the chip shortage presented an opportunity for it to expand its market share. The company could do so by maintaining current prices, at the cost of competitors who might experience supply disruptions.
“There are different levers that we can push, and who knows how successful they’ll be, but there’s just a range of options,” Apple CEO Tim Cook noted as per Yahoo Finance.
Some analysts believe that, unlike smaller smartphone makers, Apple can use its influence over long-time suppliers like Micron, SK Hynix, and Samsung Electronics to secure sufficient chips to sustain iPhone production.
Last year, Apple controlled the global smartphone market with a 20% share, with Samsung following closely with a 19% share.
Impact of Apple’s iPhone Pricing Decision
Apple’s decision on whether to raise iPhone price due to memory chip shortage will have an impact on the smartphone industry. If the tech giant maintains current prices and other market players raise theirs, iPhones will be more attractive to buyers. If Apple increases iPhone prices, competitors will likely do the same.
“This is the biggest question for the industry now. This is a two-sided sword because if Apple doesn’t raise prices, while it will help grow market share, it will also upset investors,” IDC’s Senior Research Director, Nabila Popal noted.
The ongoing memory chip shortage is expected to cause a decline of the global smartphone market for the first time since 2023. This week, Qualcomm, which is the largest designer of smartphone chips, forecasted a revenue drop due to the chip shortage.
The company, which is a major supplier for high-end Android phones, said leading Chinese customers lack sufficient memory chips to manufacture smartphones.
Investors Expect iPhone Prices to Increase
The expectation among some Apple investors is that the memory chip shortage will trigger a rise in iPhone prices. Analysts also have their eyes on Samsung. They believe that the company’s smartphone division might absorb the rising price of memory chips because it sources the processors from a different unit.
“We’re observing Apple and Samsung. If they raise prices, then they raise the ceiling and other manufacturers will likely need to adjust pricing,” Emarketer Analyst Gadjo Sevilla noted.
Still, some industry executives say companies that manufacture Android phones are watching to see whether Apple will raise iPhone prices.
