Apple iPhone 7 price hike: Can we really blame Brexit?

Apple fans can expect to pay more to upgrade to the iPhone 7 because of currency fluctuations and not because of subtle technological tweaks. In the UK, the increase in price is being blamed on Brexit, with the pound weakening while Apple executives were fine-tuning the retail price. Ultimately Apple is a premium brand, with pricing determined by perception of its value and what its suppliers think the market is willing to take. The smartphone isn’t vastly different from its predecessor, though somewhat controversially the missing headphone jack means users are likely to feel like they are wondering around with mini-tampons in their ears. The talk around the ear pieces is unlikely to deter Apple fans from queuing for the device, though. Owners will get used to them, just as they have become accustomed to varying screen sizes. History shows that Apple can do very little wrong when it comes to its product range, in part because its devices tend to be reliable and its after-sales service unrivalled. Shareholders are hopeful that the iPhone 7 will be a hit, with New York-listed Apple projecting in July that its fiscal fourth quarter revenue would move up from $45.5 billion to $47.5 billion. – Jackie Cameron

By Edwin Chan and Reed Stevenson

Apple Inc.’s new iPhone 7 isn’t a major upgrade on the previous version, despite its various updates and features—and the well-flagged news that the smartphone has no headphone jack. 

That said, the iPhone has been a game-changer. It helped Apple become the world’s most valuable company and has swept aside many a rival device over its lifespan, contributing to the decline of household names from BlackBerry to Nokia. Here’s a look at its evolution over the years. 

Apple iPhone 7 and 7s smartphones are displayed during an event in San Francisco, California, U.S., on Wednesday, Sept. 7, 2016. Apple unveiled new iPhone models featuring a water-resistant design, upgraded camera system and faster processor, betting that after six annual iterations it can still make improvements enticing enough to lure buyers to their next upgrade. Photographer: David Paul Morris/Bloomberg
Apple iPhone 7 and 7s smartphones are displayed during an event in San Francisco, California, U.S., on Wednesday, Sept. 7, 2016. Apple unveiled new iPhone models featuring a water-resistant design, upgraded camera system and faster processor, betting that after six annual iterations it can still make improvements enticing enough to lure buyers to their next upgrade. Photographer: David Paul Morris/Bloomberg

Introducing the iPhone

The first model debuts in 2007, ushering in the era of smartphones. While other devices had featured touchscreens, Apple’s was the first to package the technology so that it worked seamlessly. 

iPhone 3G

The iPhone gets its first upgrade, with 3G offering faster wireless connections. The newly-launched App Store is a key element in enhancing the capabilities of the device.

iPhone 3GS

The iPhone 3GS in 2009 isn’t a major upgrade, offering only marginal improvements in speed.

iPhone 4

The iPhone 4, which debuts in 2010, is Apple’s first radical redesign of the device. The launch also results in Antennagate: the design of the case leads to some dropped calls and forces the company to offer free antenna bands to mitigate the problem.

iPhone 4S

The iPhone 4S is another minor upgrade, helping to solve the antenna issue and boosting performance.

iPhone 5

The iPhone 5 in 2012 marks Apple’s move toward bigger screens and proves a smash with consumers, delivering rapid revenue growth for Apple.

iPhone 5C and 5S

The iPhone 5S upgrade isn’t a surprise. It’s the introduction of the more affordable iPhone 5C that raises eyebrows; designed to appeal to emerging markets, it doesn’t prove to be a big hit.

iPhone 6 and 6 Plus

The debut of the iPhone 6 and 6 Plus in 2014 is the right move at the right time. The bigger smartphones wow customers in Asia and put Apple into the top spot in China.

iPhone 6S

The iPhone 6S upgrade doesn’t change much—a bit faster, a bit better.

iPhone SE

Earlier this year, Apple surprises by reviving the iPhone 5’s size and shape in the form of the iPhone SE. A cheaper, mid-range phone, it sells better than expected in places such as Latin America, but isn’t enough to reverse a revenue decline.

iPhone 7 and 7 Plus

The iPhone 7 is a break from Apple’s two-year upgrade cycle, with the size and shape almost unchanged from its predecessor. It sports a better camera, faster performance and, in a new twist, gets rid of the headphone jack.

Brexit bites iPhone users as price jumps with weaker Pound

By Michael Scaturro

British consumers annoyed at paying more for an iPhone 7 than for its predecessor 6s can blame Brexit and the drop in the pound for the outsized U.K. cost increase for Apple Inc.’s flagship smartphone.

The base level iPhone 7 and larger-screen iPhone 7 Plus, unveiled in San Francisco this week and available in the U.K. on Sept. 16, will set consumers back 599 pounds ($797) and 719 pounds, respectively. That’s up 11 percent and 16 percent from the previous versions announced in September 2015.

There was no increase in the U.S. in for the entry level iPhone 7, which costs $649, same as the last iPhone 6s even with double the storage. The price for the 7 Plus increased 2.7 percent. In Germany, the newer phones cost more, but only by about 3 percent to 6 percent.

It’s probably no coincidence that U.K. consumers are paying a premium. Like many electronics manufacturers, Apple often factors in currency changes when it sets prices for its products in different markets. When Apple Chief Executive Officer Tim Cook unveiled the first 6s series in September 2015, the pound bought $1.54. At $1.33 now, it’s about 14 percent lower — with the biggest drop coming after U.K. voters decided on June 23 to leave the European Union.

It’s important for Apple to maintain profits, especially on its higher-priced phones, said John Butler, an analyst with Bloomberg Intelligence.

“They don’t let their margins slip with currency fluctuations,” Butler said. “They will raise prices to maintain that margin if they have to.”

Two years ago, when an especially strong pound bought $1.61, Apple didn’t increase prices at all. Apple priced the iPhone 6 at 539 pounds, 10 pounds lower than the earlier 5s. The 6 Plus made its debut at 619 pounds in 2014. The U.K. prices include value-added tax.

An Apple spokeswoman in the U.K. didn’t respond to a request for comment on its pricing policies.

Apple won’t announce iPhone 7 opening weekend sales numbers

By Mark Gurman

Apple Inc., breaking with tradition, said it won’t provide opening weekend sales numbers for new iPhone launches.

The Cupertino, California-based smartphone maker has sometimes shared early pre-order numbers and usually has announced how many iPhones were sold on the weekend after the device officially became available. The company said Thursday in a statement that it won’t continue the practice because it’s “now at a point where we know before taking the first customer pre-order that we will sell out of iPhone 7.”

By not releasing opening weekend sales numbers, Apple is holding back a key metric that some investors have used to determine the success of an iPhone launch. The world’s most valuable company is banking on the new lineup, in addition to new wireless AirPods headphones and water resistant Apple Watch models, to avoid a holiday quarter year-over-year sales drop.

Apple said that “initial sales will be governed by supply, not demand,” leading the company to determine that opening weekend numbers are “no longer a representative metric for our investors and customers.” The iPhone 7 and iPhone 7 Plus become available for pre-order on Friday, while Apple and carrier retail stores will begin selling the phones Sept. 16, the company said. CNBC earlier reported Apple’s decision.

The new iPhones, unveiled Wednesday, include updated designs with two new black color options, stereo speakers, upgraded cameras with new zooming abilities, faster and more efficient processors, improved graphics performance for gaming, better battery life, and lack a headphone jack. The new iPhones start at $649 for 32GB of storage.

This shift in strategy on iPhone sales marks the second time Apple has held back some numbers in recent years. For example, following the introduction of the Apple Watch in 2014, the company said it wouldn’t release sales numbers for the device for competitive reasons. Apple has provided no indication that it will stop announcing iPhone sales numbers with its quarterly earnings report.

Apple’s forecast for the quarter ending in September hasn’t changed, the company said in the statement. Apple on July 26 projected fiscal fourth quarter revenue from $45.5 billion to $47.5 billion. Apple reported sales of $51.5 billion and more than 48 million iPhones sold in the same quarter last year.

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