Other Phone prices stable despite chip shortages, inflation, etc.

[webkit]

Given chip shortages, supply chain issues, high inflation, etc. why is that phone prices have remained relatively stable (at least in the U.S.) compared to things like new and used car prices/values which have notably increased?

The retail price of an iPhone 13 and 13 mini is lower than a comparable iPhone 12 and 12 mini was last year, this year's Pixel 6 is cheaper than the Pixel 5 was last year, phone trade-in values are down, etc.

 

[Shirasaki]

Apple can choose to eat the fluctuation and provide stable prices to all of their products.

 

[webkit]

Apple, Google, Samsung, Motorola, etc. all seem to be able to keep prices in check. Other than availability issues here and there, you'd never know there were chip shortages, high inflation and so on based on the prices and deals that are out there.

I would think that Apple would've wanted to increase trade-in values to encourage more trade-ins so they'd have more product to sell given the 10 million or so fewer iPhones they expect to be able to produce due to chip shortages.

 

[JPack]

Not only can Apple and other smartphone manufacturers weather the price increases, but they also pay less for chips and are higher in priority compared to car manufacturers because they buy a much higher volume of chips with higher value.

In terms of trade-in, you have to understand the primary purpose of those programs is to reduce the availability of devices in the secondary market. This in turn promotes new sales. Many of those trade in devices don’t end up on the Apple refurb store and are simply recycled. Given new sales are already gated, Apple would obviously prefer to pay STMicro or TI a $30 premium for new components rather than existing device owners.

 

[pshufd]

Apple commands more supply-chain reliability because of high volumes.

 

[webkit]

In terms of trade-in, you have to understand the primary purpose of those programs is to reduce the availability of devices in the secondary market. This in turn promotes new sales. Many of those trade in devices don’t end up on the Apple refurb store and are simply recycled. Given new sales are already gated, Apple would obviously prefer to pay STMicro or TI a $30 premium for new components rather than existing device owners.

True but I still thought they might want to boost their certified refurbished product availability and sales (profits) to make up for some of availability issues on new products. The refurb market had been seeing strong growth in recent years but I'm not sure what kind of margins Apple sees there.