During the Apple event yesterday (September 7), I kept my reactions to a bare minimum. Part of it’s because I’m usually too busy taking notes — and part of it’s because I’ve been covering product launches long enough that few revelations truly surprise me these days.
But Apple had a few such revelations when it was showing off its new products, particularly the iPhone 14 Pro and the Apple Watch Ultra. And I admit that amid all that note-taking, I might have let out an admiring whistle or two or even the occasional “wow.”
And it wasn’t because of admittedly impressive features like crash detection in the new iPhones and the Apple Watch 8. Nor was it the satellite connectivity for emergency communications, a long-rumored feature that’s finally seeing the light of day with the iPhone 14 series of phones.
No, what impressed me with each product reveal was Apple’s asking price and how reasonable it all seemed.
The iPhone 14 price hikes that weren’t
For most of 2022, the iPhone rumor mill has been drilling one indisputable fact into our noggin — that iPhone Pro prices were going up with the iPhone 14 release. These just weren’t the pronouncements of Twitter randos either, but analysts with both sources and a long track record about being right about these things. As a result, a lot of ink was spilled over the likelihood of an iPhone 14 Pro price hike of $100, with yours truly doing more than his share of the spilling.
You can understand why we thought this was going to happen. Component prices are going up, just like the price of everything. And Apple seemed to be going out of its way to make the iPhone 14 Pro stand out from the iPhone 14, which is also retaining the $799 starting price of its predecessor. A new A16 Bionic processor, a jump to a 48MP camera, a new Dynamic Island that not only replaces the notch but handles notifications in an intriguing way, too — these upgrades all have a “Now how much would you pay” feel to them.
Yet, when the smoke cleared from Apple’s iPhone 14 Pro presentation, prices remained the same for the new models. The iPhone 14 Pro costs $999 and the iPhone 14 Pro Max costs $1,099 — the same as their comparable iPhone 13 versions.
Apple Watch Ultra is pricey, but not that pricey
To a certain extent, Apple benefitted from the same high-price anticipation with its Apple Watch Ultra announcement. In terms of features, the Apple Watch Ultra certainly lived up to what rumors had been protection — this is a durable watch with a big 49mm case and long-lasting battery built to handle the extreme conditions that athletes and adventurers throw at it.
And with those expectations came the acceptance that Apple was going to charge a lot for this particular watch — up to $999 according to some accounts.
At the end of the day, the Apple Watch Ultra isn’t anyone’s idea of cheap, not at $799. But that seems a lot more reasonable than the nearly $1,000 figure that some people had been floating around prior to Apple’s event.
Apple reads the room
A cynic might suggest that Apple probably isn’t too bent out of shape that rumor mongers missed so badly on what some of these new products were going to cost. Let reports of $100 phone price hikes and $999 super watches get people riled up and then watch the wave of relief wash over them when they learn what the actual lower price truly is. You couldn’t have scripted it better.
But I think something else was at play. Apple probably could have charged more for the iPhone 14 Pro models or the Apple Watch Ultra. It could have bumped up the price of the AirPods Pro 2 instead of keeping the same $249 cost. And it certainly didn’t have to lower the price of the Apple Watch SE (2022) to $249 for the GPS only version.
I think Apple did all these things because it read the temperature of the room — “people sure are tired of paying more money for everything these days” — and it proceeded accordingly. I don’t know if that translates to sales, but it probably generates just as much value in the form of goodwill and customer loyalty.
A frequent stat Apple torts out when talking financials with Wall Street types is the size of its installed base of active devices. That’s the number of phones, computers, watches and so forth running Apple’s software and using Apple’s services and downloading apps sold in Apple’s stores.
That number keeps hitting record highs in recent earnings announcements, and I don’t think Apple’s pricing moves for the iPhone 14 and Apple Watch 8 are going to do anything to slow that growth.