(Bloomberg) -- When Apple Inc. launched the iPhone X in 2017, the company did more than usher in facial recognition and a sleek edge-to-edge screen. It also helped establish a new category: the $1,000 smartphone.
In the eight years since, that price point has barely budged. Despite inflation and a steady stream of technological upgrades, the iPhone 17 Pro now starts at $1,099 — just $100 more. Apple’s entry-level iPhone sits at $799, also only $100 higher than the comparable model back in 2017.
Ahead of this week’s iPhone 17 debut, some analysts predicted hefty price hikes — especially with President Donald Trump’s tariffs on Chinese imports looming. Yet Apple’s changes were measured. The Pro models did climb from $999 to $1,099, but Apple softened the blow by doubling the base amount of storage to 256 gigabytes.
The new iPhone Air, replacing the iPhone 16 Plus, rose by $100 as well, to $999. After consumers braced for tariff-fueled sticker shock — with some even rushing to stores earlier this year to avoid possible levies — the adjustments were modest.
That restraint won’t last forever. Apple isn’t likely to absorb tariff costs indefinitely, and shifting iPhone production from China and India won’t eliminate the problem of rising costs. The company has already started signaling what comes next: the era of the $2,000 iPhone.
This year’s iPhone 17 Pro Max introduces a 2-terabyte storage option, priced at $1,999. It marks the first time that an iPhone has reached that nearly $2,000 threshold. And Apple wouldn’t set that price unless it believed a meaningful slice of its customer base is willing to pay it.
The trajectory is clear. Apple’s first foldable iPhone is slated to arrive next year with features rivaling those of Samsung Electronics Co. and Alphabet Inc.’s Google. Those models now sell for $1,799 to $2,419 depending on the configuration.
Given that the single-screen iPhone Air costs $999 and will share many components with the future foldable, that model will likely be at least twice as much — before storage upgrades, cases and accessories push the price higher.
Apple Chief Executive Officer Tim Cook has already told Wall Street that he believes iPhone customers are prepared to open their wallets.
“People are willing to really stretch to get the best they can afford in that category,” Cook said on a 2023 earnings call, noting that the iPhone has become “integral” to people’s lives. Consumers now use the device to make payments, control smart-home appliances, manage their health and store banking data, he said.
Looking further out, Apple is already developing a 20-year anniversary “iPhone 20,” an overhaul expected to be as radical as the iPhone X was in its day. Just as that model established the $1,000 standard, the iPhone 20 could set the stage for a far pricier new normal.
