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Investing.com -- Apple’s iPhone pricing strategy has failed to keep up with inflation, eroding shareholder value and highlighting the company’s “lack of innovation,” according to the brokerage firm Needham.
iPhone prices have risen only once per model since 2019, with the Basic model’s last increase in 2020, the Pro in 2025, and the Pro Max in 2023. Holding prices steady for long stretches has meant that in constant dollar terms, devices are worth substantially less.
For example, a Basic iPhone priced at $799 in 2020 was effectively worth just $634 by 2025 once inflation was accounted for.
“We attribute AAPL’s value-destructive pricing policies to its lack of innovation, and calculate that its strategy of ‘good enough’ has cost shareholders 13% since 2019, based on its inability to raise same-store iPhone prices to keep pace with inflation,” Needham’s Laura Martin said.
The analyst compared Apple’s actual revenues against a scenario where iPhone prices had at least matched inflation each year. Under that assumption, revenues would have been 13% higher between 2019 and 2025.
Martin noted that Wall Street defines pricing power as the ability to raise prices faster than inflation — a standard Apple has failed to meet. She added that the company’s inability to reach that threshold reflects a lack of new “killer apps” and differentiated features that could justify higher prices.
The iPhone remains the cornerstone of Apple’s iOS ecosystem, making pricing discipline a key driver of shareholder returns.
“Multiplying actual units sold by these 2 different pricing assumptions for AAPL’s three core models of iPhones between 2019 and 2025, their total theoretical revenues would have been 13% higher than actual reported revenues, which equates to value destroyed,” Martin wrote.
She concludes that Apple’s lack of innovation has reduced shareholder value by the same amount over the period, as the company failed to lift prices enough to offset inflation.