Apple holding the line on iPhone base model pricing has cost investors 13% since 2019 – Needham

Apple’s iPhone 17
Apple’s iPhone 17 launch this month included a significant error, according to one analyst, and shareholders have been and continue to bear the consequences. Priced at $799, the same as last year’s iPhone 16, the base model hasn’t adjusted for inflation. Needham analyst Laura Martin, in a Tuesday note, called this a “value-destructive” approach, estimating a 13% loss for investors since 2019.
Christine Ji for MarketWatch:
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In the last six years, Apple has only raised iPhone prices once, with the base model receiving its last price increase to $799 from $699 in 2020. By holding its base iPhone price consistent since 2020, the device is only worth $634 today in constant-dollar terms, Martin pointed out.
Had Apple raised prices in line with inflation, it would have generated revenues 13% higher than actual reported revenues, according to Martin. “There is a negative compounding effect in each year that [Apple] holds prices constant,” she wrote.
Apple’s existing pricing strategy could have benefits. By keeping prices for the base model unchanged, it could gain market share in China, J.P. Morgan analyst Samik Chatterjee wrote in a note earlier this month. The Chinese government is currently offering a 15% subsidy on digital products priced under 6,000 yuan CNYUSD, or approximately $840 USD.
However, this isn’t a winning strategy for Apple, whose inability to raise prices stems from its “lack of innovation,” Martin believes. As a result, it’s more critical than ever for Apple to launch a compelling artificial-intelligence offering, and it should put increased emphasis on “introducing ‘killer apps’ and differentiated features” to gain pricing power, according to Martin.

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MacDailyNews Take: As we wrote in June when Martin oh-so-brilliantly downgraded Apple which closed that day at $202.59 or $51.07 less per share than it’s worth today:
Laura Martin, if her life depended on it, couldn’t identify her ass from her elbow.
Needham clients should look elsewhere for investment advice.
Forget Apple’s significant AI issues. You can use Grok, ChaptGPT, or any other GenAI tools on your iPhone (and iPads and Macs) via apps and the web until Apple finally gets their shit together (which the company will eventually do, even if it takes a new CEO). The next-gen iPhones will be compelling for hardware alone.
Apple’s next-gen Siri is coming in spring 2026 and, again, a little birdie sings us very positive songs regarding that release.

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