Apple’s upcoming iPhone 16 range is poised to usher in new features and performance improvements, but a looming price increase could dampen consumer enthusiasm. According to industry analysts, while Apple Intelligence—a key AI-driven feature—could revolutionize the user experience, the expected price hike may negatively impact demand.
Piper Sandler’s Insights on the Price Hike
Investment firm Piper Sandler has expressed concerns about the impact of the iPhone 16 price increase. While Apple Intelligence has raised excitement among investors and tech enthusiasts alike, it may not be enough to offset the hesitance that comes with a higher price point. Piper Sandler recently increased Apple’s target price to $225 based on the promise of Apple Intelligence. However, the firm notes that features tied to this AI-driven system may not roll out immediately with the iPhone 16, delaying its full potential impact.
Consumer Spending and Economic Concerns
The analysts highlight another potential obstacle: consumer discretionary spending. With inflation and other economic factors tightening budgets, a price hike on the iPhone 16 could deter some buyers. As a result, the much-anticipated super-cycle of iPhone upgrades—when consumers rush to replace older models—may be slower than expected.
Piper Sandler’s report suggests that Apple might need to market the benefits of Apple Intelligence more effectively to entice buyers. Without a clear “killer AI app” or feature at launch, consumers may hesitate to spend more on the iPhone 16.
Potential for Lower-Priced Alternatives
To mitigate the impact of the price hike, Apple may introduce lower-cost options for its other products. Piper Sandler points to the potential for a more affordable Apple Watch SE or lower-priced AirPods as valuable alternatives for consumers who might skip the iPhone 16 upgrade due to its cost.
