iPhone 16 price increases could subdue an update super-cycle

Investment firm Piper Sandler believes Apple Intelligence will not boost iPhone 16 sales at first, and an expected price hike may impact demand.

In July 2024, Piper Sandler raised its Apple target price to $225 specifically because of Apple Intelligence. Ahead of the iPhone 16 launch, the company still believes that Apple Intelligence will be key — but not immediately.

That's because the features of Apple Intelligence will launch later in the year, rather than coming out alongside the iPhone 16 range. Then, too, the company says that it wants to see Apple do more to market the benefits of Apple Intelligence, given "the lack of a killer consumer AI app" to date.

Piper Sandler is not expecting "any revolutionary hardware innovations," but also wonders whether Apple can continue to keep its existing iPhone pricing. It's possible, say the analysts, that Apple will have to charge more because of the costs of Apple Intelligence.

That plays into how the analysts also believe that consumer discretionary spending "is cracking." Any iPhone price increase, then, could be problematic.

But then Piper Sandler says that "the potential for an SE version Apple Watch and a lower priced AirPods alternative could prove to be valuable in the current economic backdrop."

Given all this, Piper Sandler argues that the value of Apple Intelligence is already represented in its existing price target of $225, so it is not changing that.

Apple will announce its iPhone 16 range — plus Apple Watch and potentially new AirPods — in its "It's Glowtime" event on September 9, 2024.

9 Comments

DAalseth 3012 comments · 6 Years

About 1 month ago

My plan is to upgrade to a ProMax. It will be the most I’ve ever spent on a phone but I’m ok with that. But if Apple bumps them up another hundred bucks, I’ll likely go with the Pro instead. If they go more then that, I’ll be seriously considering waiting another year. You can’t get blood from a stone.

ssfe11 98 comments · New User

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse.

M68000 859 comments · 7 Years

ssfe11 said:

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse.

I would just be happy if they finally do 120hz screens on all current phones they sell. At the moment, not feeling excited about all this AI stuff, Apple or otherwise. I’m concerned about an “AI” phone (whatever that is) that will interrupt the user and annoy. But the marketing people are full steam ahead so get used to the advertising…

ssfe11 said:

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse.

Not for me. I have an 11 and it’s really time. Apple Intelligence is not helping make the sale, actually to the contrary.

kdupuis77 158 comments · 15 Years

ssfe11 said:

IMO people use any excuse at all to upgrade their iPhones. Apple Intelligence is the ultimate excuse.

The whole overhyping of Apple Intelligence gives me the Apple Watch Series 9 double tap pinching thing vibes. They made such a big deal about that feature, I got my Series 9 and whoop-de-doo it sucks lol. And then they took away an objectively more useful feature shortly after in the pulse oximeter sensor. I'm about due to upgrade iPhones, but I think I may also take the "downgrade" to the regular Pro model to absorb some of the inevitable price increase this go around.