Why Apple Decided to Raise the Price of the iPhone in Other Countries but Not in the United States or China

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Last Updated on November 6, 2022 by Bitfinsider

The series 14 models of Apple’s most recent iPhones come equipped with a plethora of new and improved features, including but not limited to improved displays, cameras, and satellite messaging capabilities. However, the cost of these things may be more expensive for you to purchase depending on where you live.

Potential buyers in the United States and China did not see any increases in price when compared to the series 13 models. This is despite the fact that some analysts predicted that Apple might raise the price of its latest iPhones across the board due to ongoing supply chain challenges and inflation.

However, customers in countries and places such as the United Kingdom, Germany, Japan, and Australia found that the most recent models came with large rises in price.

For instance, the lowest-end variant of the iPhone 14 can be purchased in the United States for the same price—$799—that the corporation demanded for the iPhone 13 when it was introduced a year ago.

The starting price of an iPhone 14 in the United Kingdom is £849, which is equivalent to about $975 USD. The starting price of the iPhone 13 was raised to £779, which is equivalent to an increase of almost $80.

This price discrepancy further widens when additional features are added to more advanced versions. For instance, the price of the iPhone 14 Pro Max in the United Kingdom is one hundred and fifty pounds (£150) higher than the price of the comparable model from the previous year.

The volatility in the value of the local currency was the impetus behind Apple’s decision to raise the price of its products sold in certain areas.

During Apple’s results call with analysts for the company’s fourth quarter last week, the company’s chief financial officer, Luca Maestri, stated that “practically every currency across the world has depreciated versus the dollar.” “The strength of the dollar makes things challenging in a variety of areas. It should come as no surprise that the difficulty is caused by our pricing in emerging economies, which also has an effect on the translation of revenue back into dollars.

Apple’s sales for the quarter was reported to have increased by 8% to a total of $90.15 billion. However, Apple CEO Tim Cook stated in an interview with Bitfinsider that the business would have grown by “double digits” if it weren’t for the strength of the dollar.

According to Maestri, the fluctuations in the value of foreign currencies are “a very substantial component that is influencing our results, both revenue and gross margin.” Apple does hedge against its currency exposures “in as many places as possible around the world,” he said; however, these sorts of protections do start to reduce as the company needs to continue to buy new contracts. Apple hedges against its currency exposures “in as many places as possible around the world”

According to Maestri, Apple also considers the current state of the foreign exchange market before releasing new products, which is what led to the most recent round of price increases.

“In some circumstances, for instance, clients in overseas markets had to… they saw some price hikes when we launched the new items,” he added. “This is not something that customers in the United States, for instance, have observed.” “Unfortunately, this is the circumstance that we find ourselves in right now due to the strength of the dollar,” said the speaker.

There have been occasions in which Apple has instead chosen to absorb such costs, despite the fact that recent currency swings in comparison to the United States dollar are prompting some international purchasers to pay more for an iPhone.

In 2019, when the value of the United States dollar rose in comparison to other currencies, Apple adjusted foreign prices in some markets and reset them to be close to or the same as they had been in local currencies a year prior. This occurred during the same year that the value of the United States dollar rose.

However, Apple made that decision due to a decrease in sales as a result of the price rise, which was the primary cause of the problem. For instance, Apple’s sales in Turkey, where the local lira had dropped by 33 percent against the dollar in 2019, resulted in a decrease of 700 million dollars.

In an interview with Reuters at the time, Cook stated that “We’ve decided to go back to iPhone prices more commensurate with what our local prices were a year ago in the hopes of helping the sales in those areas.” This was in reference to the fact that “we’ve decided to go back to iPhone prices more commensurate with what our local prices were a year

Apple, on the other hand, claims that there has been no sign of a slowdown in demand in those areas in 2022. Maestri said that it experienced growth of more than ten percent in a number of countries, including India, Indonesia, Mexico, Vietnam, and others, even when measured in their local currencies.

“It’s important for us to look at how these markets perform in local currency because it really gives us a good sense for the customer response to our products, the engagement with our ecosystem, and in general, the strength of the brand,” Maestri said during the earnings call. “It really gives us a good sense for the customer response to our products, the engagement with our ecosystem, and in general, the strength of the brand.” “And I have to say, in that respect, we feel very, very good about the progress that we’re making in a number of markets around the world,” the narrator says. “And I have to say, in that respect, we feel very, very happy about the progress that we’

Although there have been some indications that demand for new iPhones in the country may be decreasing, the value of the United States dollar has also been consistently rising against the Chinese yuan over the past six months. Despite the fact that Maestri stated that Apple set new records in Greater China during the September quarter, a recent report from Jeffries stated that sales of the four new iPhone 14 models in China during their first 38 days of being sold have decreased by 28% when compared to sales of the iPhone 13 models during the same time period.


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