Prospective iPhone buyers in August may find themselves in a somewhat paradoxical situation.

On JD.com, the iPhone 17 (256GB model) is priced at 5,449 yuan, inclusive of a 500-yuan government subsidy. The 2026 government subsidy program, running from January 1 to December 31, offers a 15% subsidy (capped at 500 yuan) on smartphones priced below 6,000 yuan. JD.com has established a dedicated "Apple Government Subsidy" section to streamline this process, and the price has remained steady for over six months.

Meanwhile, Bloomberg journalist Mark Gurman reported on August 2 that the new iPhone models set to launch in September will see price increases of $100 to $200 (approximately 675 to 1,350 yuan). He was categorical: "There’s no doubt prices will go up." The first foldable iPhone is expected to be even pricier, with a starting price of at least $2,000 (approximately 13,497 yuan).

While current models are experiencing price reductions, new models are being teased with price hikes. Apple is playing a dual strategy.

1. The Calculation Behind the 5,449 yuan Price Tag

Let's delve into the pricing strategy.

The iPhone 17 is priced at 5,449 yuan, but Apple is not the primary contributor to this price cut. Smartphones under 6,000 yuan qualify for a 15% subsidy, with a maximum of 500 yuan, and the standard iPhone 17 model fits snugly within this subsidy bracket. The real financial boost comes from government subsidies, with Apple making only limited concessions. In terms of distribution, JD.com has optimized the process for claiming government subsidies, trade-in evaluations, and applying platform coupons—a process that operates most seamlessly on JD.com, given its strong presence in the 3C product market.

Essentially, Apple is capitalizing on policy benefits and channel efficiency with minimal cost to itself.

The subsidy threshold is also cleverly designed. The 6,000-yuan cap includes the standard iPhone 17 model but excludes the higher-priced Pro series. Subsidies are thus strategically directed towards Apple’s most affordable, high-volume model. The Pro models do not require price reductions, preserving the pricing structure, while the entry-level model becomes highly appealing. Given the real pressure Apple faces in terms of market share in China, its current approach is to drive sales volume with the standard model while maintaining Pro prices.

The results are evident. According to the Ministry of Commerce, 79.098 million digital and smart products were purchased in the first half of 2026, with sales volume increasing by 13.4% year-on-year. The combination of government and platform subsidies has encouraged many consumers to upgrade their devices earlier than planned. Before the September new product launch, Apple is still striving to capture as much of this upgrade demand as possible through these subsidies.

An often-overlooked aspect is that in this round of price reductions, Apple is not relinquishing its pricing power but rather the "rent" on its pricing power. Subsidies come from government funds, and once the policy concludes, prices can be raised again at any time.

Apple has never committed to long-term low pricing; it is simply buying time.

2. The Rationale Behind Price Hikes and the Ultimate Goal

Now, let's discuss the price hikes.

Gurman provided specific reasons in his interactions with netizens, with the primary driver being supply chain constraints. Memory and processor supplies are tight, and procurement costs are rising. On the product front, the new Pro series features an upgraded camera module, with significantly increased hardware investment.

Memory price hikes are not just an excuse; they have industry-wide support. Over the past two years, surging demand for AI servers has led Samsung, SK Hynix, and Micron to shift production capacity towards HBM and enterprise-grade products, squeezing consumer-grade memory supplies and keeping prices on an upward trajectory. Smartphones, being major buyers of memory chips, cannot escape this trend.

Apple’s strategy is to pass these cost increases on to consumers, and it is doing so steadily. Prices for the iPad and Mac have already been adjusted upward by $100 to $200. By applying the same price increase to the iPhone, Apple is following a path already accepted by the market.

This sequencing is itself a tactic for managing expectations. By first testing market tolerance with less attention-grabbing products and then applying the same increase to the highly anticipated iPhone, Apple minimizes backlash.

The foldable iPhone presents a different scenario. Gurman’s exact words were to prepare consumers for a higher budget, with a starting price of at least $2,000, positioning it above mainstream foldable phones on the market. While foldable phones do incur higher costs for hinges, screens, and structural design, the $2,000 price tag is not solely based on costs. It serves more as a new price anchor, pushing the average price of the iPhone lineup even higher. In the future, when discussing the upper price limit for iPhones, the reference point will no longer be the Pro Max.

The concept of a price anchor is about setting a high target to achieve a moderate outcome. With a $2,000 foldable iPhone on the market, its real purpose may not be to sell in large quantities but to make the $1,500 Pro Max seem reasonable. Consumers judge affordability not by absolute prices but by comparison.

Every time Apple sets a new price anchor, the average price level of its entire product line shifts upward.

When viewed together, the logic behind these two strategies is straightforward. For current models, Apple leverages government subsidies and JD.com’s distribution channels to boost sales volume, digesting demand before the next generation’s price hikes. For new models, it uses rising costs as a justification for higher prices, while the foldable iPhone pushes the upper price limit even higher.

Volume-focused models drive sales, while profit-focused models secure margins, with the two user groups kept distinct.

3. Subsidy Effectiveness Diminishes, and the Window for Price Hikes Opens

For this strategy to be effective, one premise must hold: subsidies must still influence consumer behavior.

However, this premise is weakening. According to IDC, approximately 134 million smartphones were shipped in China in the first half of 2026, down 4.2% year-on-year, with the decline widening to around 15% in the second quarter. IDC China research manager Guo Tianxiang’s assessment is straightforward: the pulling effect of government subsidies is showing diminishing marginal returns, with significantly reduced appeal compared to 2025.

The reason is not hard to fathom. Consumers who planned to upgrade their devices have largely done so in the first half of the year, with subsidies bringing forward demand and depleting it for the second half.

For Apple, this is a clear timing signal. During the peak effectiveness of government subsidies, it captured a group of price-sensitive users with the 5,449-yuan iPhone 17. As subsidy effectiveness declines and funds are gradually exhausted, the space for growth through subsidies will shrink. Releasing news of price hikes now gives hesitant consumers a reason to act: buy now, or pay more next month.

For JD.com, government subsidies represent ready-made business, with the Apple section driving high-frequency upgrade orders. However, as subsidy effectiveness fades and funds are capped, the growth potential of this business is also time-bound. For consumers, now is a good time to compare prices—nothing more. Government subsidies are still in effect, the iPhone 17 is at a low point in pricing, and new model price hikes have not yet materialized. Those wanting the current model can benefit from real subsidies. Those waiting for new models must accept not just a $100 to $200 increase but also potential queues and price markups during initial supply shortages.

Conclusion

Apple’s pricing strategy has never been overly complex: affordable models attract consumers, while premium models secure profits.

But the real narrative this year is not Apple itself but the evolving nature of pricing. Traditionally, smartphone prices were determined by costs and branding, with adjustments made annually. Now, policy subsidies, channel efficiency, supply chain costs, and leaked expectations all intertwine, turning prices into a variable that changes quarterly or even monthly. Consumers face not a single price but a pricing timeline.

Apple understands this shift, so it no longer pursues a "reasonable price" but instead manages a "pricing curve."

It lowers its stance during peak subsidy periods, raises thresholds during cost inflation cycles, and resets anchors at form factor transition points. Each move seems minor individually, but together they form a sophisticated pricing machine.