Every September, Apple unveils its next-generation iPhone, and with it, a predictable question arises: What happens to the price of last year’s model? Specifically, will the price of the iPhone 16 drop after the iPhone 17 is released? To answer this, we need to look beyond Apple’s marketing playbook and dig into the economic principles that drive product pricing in competitive, technology-driven markets.
Historical Trends: What Happens When a New iPhone Launches?
Looking at Apple’s pricing strategy over the past decade reveals a consistent pattern:
- Official price cuts on older models: When the iPhone 14 launched, the iPhone 13 dropped by $100 in official Apple Stores. Similarly, the iPhone 12 saw a comparable reduction when the iPhone 13 arrived.
- Gradual discounting in secondary markets: Retailers like Amazon, Best Buy, and carriers often apply steeper discounts within weeks of the launch to clear inventory.
- Acceleration of depreciation in resale markets: On sites like eBay or Swappa, last year’s iPhone typically loses 10–15% of its resale value in the month immediately following a new launch.
The data show that Apple intentionally controls price drops in official channels (usually small and incremental), while third-party sellers and the secondhand market respond with more aggressive reductions to stay competitive.
The Economic Principles Behind the Price Drop
Several economic forces explain why iPhone 16’s price will decline once iPhone 17 arrives:
- Depreciation and Perceived Obsolescence
Technology products follow a steep depreciation curve because newer models quickly make older ones feel outdated—even if the performance gap is minimal. This is a textbook case of planned obsolescence shaping consumer demand. - Supply and Demand Dynamics
When the iPhone 17 launches, consumer demand shifts toward the new model. Demand for the iPhone 16 declines, which pressures prices downward. Retailers holding excess iPhone 16 inventory are incentivized to discount in order to liquidate stock. - Price Anchoring
Apple strategically sets the price of the iPhone 17 as the new “anchor.” By keeping the older model cheaper, Apple makes the newer phone look like a premium upgrade, while still capturing value from budget-conscious buyers. - Market Segmentation
Apple benefits from offering multiple price tiers. Cutting the iPhone 16’s price allows Apple to target mid-market buyers who would otherwise hesitate at the full iPhone 17 price tag. This segmentation maximizes Apple’s total revenue across different consumer groups.
When Is the Best Time to Buy an Older iPhone?
Based on historical data and economic reasoning, here’s a breakdown of the optimal timing:
- Immediately After Launch (Weeks 1–4): Apple officially cuts the price by around $100. Retailers may add small extra discounts, but savings are modest.
- 1–3 Months After Launch: This is typically the sweet spot. Retailers begin clearing inventory, and secondary market prices drop sharply as early adopters resell their iPhone 16 to fund an upgrade.
- 6–9 Months After Launch: Discounts continue, but stock availability becomes unpredictable. You may have fewer choices in color or storage options.
- 12 Months After Launch: Prices fall further, but at this point, another new iPhone is about to arrive, making the cycle repeat.
Recommendation: If you want the best balance of price and availability, buy the iPhone 16 1–3 months after the iPhone 17 release. This period captures the steepest resale depreciation and aggressive retailer promotions, without the risk of supply drying up.
Conclusion
Yes—the price of the iPhone 16 will drop after the iPhone 17 is released. This is not just Apple’s marketing strategy, but a reflection of broader economic forces: depreciation, supply and demand, consumer psychology, and market segmentation. By studying historical patterns and the principles behind them, savvy buyers can time their purchases to maximize value.
In short: if you’re eyeing the iPhone 16, don’t rush. Patience—at least for a few months after the iPhone 17 launch—can save you a significant amount of money.
