In recent years, Apple has followed a conservative pricing strategy, keeping the cost of its smartphones relatively stable. However, recent events point to possible changes in the company’s approach. This started with the unexpected announcement of the iPhone 16e, which many expected to be a new version of the budget-friendly iPhone SE, but instead, Apple introduced a device with a price tag of $599. This was the first signal that Apple is setting the stage for higher prices on its flagship models, including the anticipated iPhone 17.
Many analysts and enthusiasts assumed that Apple would introduce a new version of the iPhone SE, traditionally positioned as a budget alternative to flagships. The expected price was around $429, which is in line with previous SE models. However, Apple surprised everyone by launching the iPhone 16E with a starting price of $599. This decision has raised many questions, especially since the standard iPhone 16 costs $799.
At first glance, this price may seem too high for a device positioned as an “affordable version”. However, if you look at the specifications of the iPhone 16e, it becomes clear that it is in many ways close to the base model of the iPhone 16. Additionally, its price is competitive with the market: Samsung Galaxy S24 FE ($649) and Google Pixel 8a ($499). Thus, Apple did not drastically overvalue the price, abandoning the idea of producing a truly budget smartphone.
The lack of a new affordable iPhone SE could be attributed to several factors. First, the budget smartphone market is becoming less profitable for Apple, as the company focuses on the premium segment with higher margins. Second, it may be a strategic move to prepare users for higher prices on flagship models. By discontinuing budget options, users accustomed to affordable devices may consider more expensive models as the only alternative.
Rumors about the iPhone 17 have already begun circulating, indicating that Apple is seriously planning to upgrade its flagship line. The new smartphone is expected to receive a thinner body, an improved camera, a proprietary C1 modem, an updated battery, and a new processor. All these improvements are likely to increase the cost of the device. If the iPhone 16e has already become the first step towards price increases, then the iPhone 17 may be the next logical step.
In recent years, Apple has rarely made drastic changes to its pricing. For example, the iPhone 12–16 models consistently started at $799, while the Pro Max models went up from $1,000 to $1,200 only with the 15th and 16th models. Since its 2016 debut, the iPhone SE has also barely changed its initial price — the increase from $400 to $429 is insignificant. This made the budget iPhone almost half the cost of the standard model. However, the potential shift in the company’s pricing strategy could have a significant impact on Apple stock performance.
In addition, Apple may raise prices for other devices. The new base iPad is expected to rise from $349 to $449, and the iPad Air, which has cost from $600 for several years, may also increase in price.
Despite the uncertainty surrounding these pricing changes, AAPL stock increased at the end of the week despite growing volatility after such news. The company was among the top stock gainers, reflecting investor confidence in its long-term strategy. This suggests that investors remain confident in the company and are waiting for upcoming reports and announcements.
Apple is gradually preparing its users for higher device prices. The first step in this direction is abandoning the budget iPhone SE in favor of the more expensive iPhone 16e. The next logical step will be increasing the price of the iPhone 17, which, according to rumors, will receive significant improvements. Users should be prepared for the fact that the era of affordable iPhones is ending, and in the future, the company will rely on premium devices with corresponding prices.