Apple’s latest price changes speak volumes about future of the company

Amid rampant U.S. inflation, Apple is raising prices on some services, but its iPhone pricing has remained the same, setting the company on track for the lowest iPhone gross margin in any of the last four years. For Apple’s future, expanding the gross profit from services is increasingly important.

Adam Levy for The Motley Fool:

The cost of everything has gone way up over the past year due to inflation, and the iPhone is no different. Estimates indicate the bill of material for the iPhone 14 Pro Max was 20% higher than that of the 13 Pro Max. The cost of all the components found inside that little glass rectangle totaled nearly 46% of Apple’s asking price this year. That’s the highest cost of material relative to its price Apple has paid for any Max model.
Instead of passing on the increased costs to consumers, Apple decided to keep the price of all its iPhone models the same. With competitors increasing prices and inflation running rampant, it means Apple made its iPhones much more attractive in terms of price.
It was just a few years ago that Apple TV+ was seen as a clever way to incentivize new iPhone purchases… But the recent price hike indicates Apple is serious about making the streaming service a profitable endeavor. It’s making major licensing deals with sports leagues and its prestige original content is starting to gain traction with a broad audience.

MacDailyNews Take: The more Macs, iPads, and iPhones it has in users’ hands, the better Apple sell its most profitable and strongest-growing segment, services.
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