But over the past couple of months, that has begun to shift. In late June, the company was forced to raise prices on all Macs and iPads due to the worsening RAM crisis, including the MacBook Neo, a laptop that epitomized Apple’s pursuit of value so perfectly, it even exceeded Apple’s own lofty expectations. What was seen as the sign of a new era for Apple’s affordability now costs 20 percent more than it did when it launched in March and suddenly isn’t an impulse buy.
Now it looks like that balancing act will get a little more precarious when Apple launches its new iPhones next month. Not only is Apple expected to raise prices on iPhones, but the highly anticipated folding iPhone Ultra will likely start at $2,000 or more. And suddenly, Apple’s carefully crafted balancing act could come crashing down.
Tipping the scales
In a way, this all started with the iPod. When it launched in 2001, it cost $399 for 5GB of storage, the same price industry-leading Creative charged for its Nomad Jukebox that had four times the storage. Naturally, the iPod was seen as overpriced, outmatched, and downright laughable–until people got to use one and discovered that Apple got everything right. The form factor, transfer speeds, sound quality, and navigation were all superior to the Nomad Jukebox, and it didn’t take long for the iPod to become the most popular mp3 player.
And then Apple did something somewhat uncharacteristic–it expanded the line with cheaper models. Within four years, there was the $249 mini, $149 nano, and $99 Shuffle, basically an iPod for every budget. It was a strategy that paid off, turning the iPod into a cultural sensation with some 500 million sold.
When Apple followed up the iPod with the iPhone in 2007, there was a similar sticker shock. It started at $499 with 4GB of storage or $599 for 8GB of storage with a 2-year Cingular contract (rebranded AT&T Mobility just before the iPhone went on sale), about double what other so-called smartphones cost. But the iPhone was a repeat of the iPod: It quickly proved its worth, cheaper models followed, and the industry shifted. Apple repeated the formula with the iPhone X, pushing the starting price to $999 for the first time, then keeping the price steady and offering cheaper options alongside it.
But nine years later, Apple is at a crossroads. While the RAM crisis has spared the iPhone thus far, there are numerous signs that Apple is set to launch its most expensive iPhone Pro line ever, with prices set to rise $100-$200 across the board, and even more for higher-end storage options. To make matters worse, Apple is reportedly delaying the base iPhone 18 until the spring. That means there won’t be a new iPhone this holiday season that costs less than $1,200–and we don’t know yet if Apple will increase prices for the 17 and 17e.
