iPhone 16 price hikes could cap the update supercycle

In July 2024, Piper Sandler raised its Apple price target to $225, specifically because of Apple Intelligence. Ahead of the iPhone 16 launch, the company still believes Apple Intelligence will be key — but not right away.

That’s because the Apple Intelligence features will launch later this year, rather than arriving with the iPhone 16 series. The company also says it wants Apple to do more to promote the benefits of Apple Intelligence, given the “lack of a killer consumer AI app” to date.

Piper Sandler doesn’t expect “any revolutionary hardware innovations,” but also questions whether Apple will be able to maintain current iPhone prices. Analysts say it’s possible Apple will have to charge higher prices because of Apple Intelligence costs.

That fits in with analysts also believing that discretionary consumer spending is “bursting.” Any iPhone price hike could be problematic.

But then Piper Sandler says that “a potential Apple Watch SE release and cheaper alternative to AirPods could prove valuable in the current economic climate.”

With all that said, Piper Sandler says Apple Intelligence’s value is already reflected in its current $225 price target, so the company has no plans to change it.

Apple will announce its iPhone 16 series — as well as the Apple Watch and potentially new AirPods — at its “It’s Glowtime” event on September 9, 2024.