What a pickle.
Apple probably wants to go all-out for its tenth anniversary iPhone when it arrives this autumn, packing the device with new features and a refreshed design. That might mean charging $US1,000 in the US and £1,000 in the UK for a top-of-the-line device.
But its biggest rival, Samsung, has just offered up the Galaxy S8 for £689 in the UK, so Apple needs to keep pricing realistic.
Analysts are split on whether Apple might stick the $US1,000 price tag on the high-end iPhone. But a new analyst note from Longbow, sent to investors on Tuesday, offers more proof that Apple should at least be thinking about it.
Analysts Shawn M. Harrison and Frank Carson wrote that it increasingly costs Apple more to make the iPhone, saying design changes have driven “a mid- to high-single digit increase” in recent years. That’s before Apple even thinks about introducing a pricier OLED display, which it reportedly will for the new iPhone, and takes a “30% increase in memory prices” into consideration.
They wrote that an OLED iPhone would cost $US30 (£23) more to make, which would cut out most of the benefit of a higher price tag. The analysts wrote that introducing a higher price tag now would be a good thing long term for Apple’s margins.
They still balked at Apple charging $US1,000 for its anniversary edition iPhone, but did consider an average selling price of $US849 (£663). That’s in line with other analyst predictions of $US850 (£664) to $US900 (£703).
They wrote: “With a likely shift in form factor for the [anniversary iPhone] with accounting for memory prices that are up 30%+, the high-end model should carry a higher price point relative to the $US769 for the iPhone 7 Plus. Whether a rumoured $US1,000 price point becomes reality is unknown, but for a point of comparison, Samsung’s new S8 Plus is retailing for $840 USD and initial demand for the S8 is higher vs. last year.”
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