GoKawiilApple recently increased the prices of most of its products, from the Apple TV and HomePods through iPads and Macs to the Vision Pro. iPhones have so far escaped the increases, but that will likely change in September.
You’d think that would be bad news for the company, reducing demand – but ironically, increasing memory costs might actually end up boosting iPhone sales …
That’s because price differentials with Android smartphones could be reduced as a result of difficult decisions being made by their manufacturers.
Android smartphones have historically been available at all price points, with many models selling well below $400. But market intelligence company Omdia suggests that we could see a dramatic reduction in the number of Android models in this price bracket.
It says there are already clear signs of this and it will only get worse.
Memory costs have become a serious burden for mid-to-low-end smartphones, contributing to a year-on-year decline of over 22% in the market for smartphones priced below $400 […] Analyst from consumer team of Omdia noted that the situation will worsen as memory prices continue to rise in the coming quarters […] Based on the memory price trend for the coming quarters, low-end products are already becoming unprofitable and face a high risk of weakening demand as retail price continues to rise. As a result, smartphone vendors are proactively and gradually retreating from the low-end segment in this year.
Many Android buyers have historically considered iPhones too expensive, but if they are facing pricing above $400 for Android models, that may well change their price perceptions. If they’re looking at $500 or $600 for an Android, then suddenly an entry-level iPhone might look a lot more appealing.