“Android handset makers could end up in a world of hurt if Apple cuts the price of the standard iPhone lineup,” Adrian Kingsley-Hughes writes for ZDNet. “All indications suggest that the tenth-anniversary iPhone 8 (or whatever it ends up being called) is going to come with a hefty price tag, around the $1,000 to $1,200 mark. One prominent Apple watcher has suggested that Apple could use the windfall from the sale of the iPhone 8 to slash the price of the iPhone 7s/7s Plus.”
“Despite only accounting for about 20 percent of handset shipments, Apple set the price bar for premium smartphones, and as such pulls in some 85 percent of the market revenue,” Kingsley-Hughes writes. “The Android market is dominated by mid-priced and budget Android devices, a segment where profit margins are razor thin (or is some cases, non-existent. Companies such as Samsung are heavily reliant on sales of premium Android handsets, and anything that upset that could be bad.”
MacDailyNews Take: Let’s hope for very, very bad, okay? 🙂
“Apple could be getting ready to upend the entire market,” Kingsley-Hughes writes. “The company is in a unique position to be able to release a higher-end, higher-priced Cupertino giant and use the massive cash that would generate… to essentially subsidize the rest of the iPhone line.”
Read more in the full article here.
MacDailyNews Take: Enjoy the impact at the finish line as your race to the bottom barrel gathers speed, iPhone knockoff peddlers!
Naw. Android users don’t really care about Apple. That is pretty apparent and has been for awhile. Usually, Android users stick with what they love, and Apple users stick with what they love…typically. There are always exceptions, but people are generally stubborn as mules, and don’t embrace change well.
“people are generally stubborn as mules, and don’t embrace change well”.
Because, people are too lazy to learn a new things. Plain and simple.
Some Android users are just sticking with what they can afford.
…and so they should. There’s no shame in that. It’s still being said that an iPhone is no better than the average Android smartphone. Maybe there are a lot of people who simply can’t tell the difference or the slight difference doesn’t matter to them.
Apple could very easily do what they did with the $329 ($459 with LTE), $429 ($559 with LTE) iPad pricing, and the $649 ($779 with LTE) to $949 ($1079 with LTE) iPad Pro pricing.
iPhone SE 32 GB $399
iPhone SE 128 GB $499
iPhone 8 32 GB (AKA 7S) $549
iPhone 8 128 GB $649
iPhone 8 plus 32 GB $669
iPhone 8 plus 128 GB $769
iPhone Edition 64 GB $969
iPhone Edition 256 GB $1069
iPhone Edition 512 GB $1169
An iPhone 8 priced at $549 would be a very attractive offering, particularly on a two year Apple purchase plan. That pricing would likely result in considerable iPhone 8 sales. There would likely be no higher capacity offerings for the iPhone 8, topping out at 128 GB. If people can afford higher capacity, then they can afford the Edition. The Edition sweet spot would likely be $1069.
“One prominent Apple watcher has suggested that Apple could use the windfall from the sale of the iPhone 8 to slash the price of the iPhone 7s/7s Plus.”
There isn’t going to be a windfall, and Apple isn’t going to offer an iPhone “8” for $549. The technology Apple is rumored to be including in the the iPhone “8” will add about $80/$100 to the handset’s COGS (to approx $450). Apple is the firm it is BECAUSE it doesn’t compete on price (Androids). Price is how you market product when you have nothing positive that differentiates your product from others.
Maxed out the iPhone “8” will most likely sell for $1,099. Entry level will start at about $899. Before offerings reflect a price increase of about $130. That’s small potatoes compared to what Apple is rumored to be offered vs previous iPhones.
It would be crazy cool to see Apple put out a new iPhone SE edition that drops the headphone jack, drops the home button, adds a larger OLED (~5″) that covers the whole front, the front sensors for FaceID, waterproofing, and wireless charging. No need for 3D touch or a huge taptic engine or stereo speakers. Just a very small device that maximizes the screen and cameras, and that’s it. Price it at $500 for 64GB and they would never catch up with demand.
iPhone SE is on a different release cycle to the flagship iPhones. I wouldn’t expect to see any iPhone SE releases in the September product launches. Look for something happening in the spring for the SE model.
When you extend the screen to the edges of the case and do away with the bezels and home button, the greatest benefit happens with the smaller screens, so I would expect the SE model to take full advantage of that idea.
I’m not concerned about what effect the iPhone has on Android manufacturers. Android smartphones have become prolific because those are the smartphones most people prefer to own. Apple isn’t going to hurt smartphone manufacturers who sell low- to mid-tier smartphones. Android smartphone business will be as usual. Whatever iPhone Apple sells isn’t going to change the fact that Android basically owns the smartphone market in terms of market share percentage.
Will more expensive iPhones change the way Wall Street values Apple? I don’t think so. The iPhone will still be grimly talked about in terms of declining market share percentage. People will still claim iPhones are too expensive. Honestly, what difference does it make if Apple is selling a $1000 smartphone. It doesn’t really hurt anyone. Why are people getting upset over it? If they can’t reasonably afford it, they simply shouldn’t buy it.
There are so many things in life the average working stiff can’t afford, but does that mean companies shouldn’t sell expensive products? It’s not as though every iPhone is $1000, so why are all these people complaining about the cost of the high-end model.
Think about it. A smartphone is practically the world’s go-to information/communications device and sees more use than any other mobile device, so it should be considered a very valuable product to users. If a premium device is offered it should be welcomed and not criticized. If a consumer can’t afford it, don’t blame Apple. A consumer should either try to earn more money or look for some product that’s more affordable to them.
How stupid would I be if I blamed Ferrari for selling a car I can’t currently afford. I’m glad Ferrari builds those type of cars. They’re wonderful technical marvels. It gives some people incentive to earn more money to afford one. I see no logical reason to hate Ferrari for building expensive sports cars. It just seems really stupid to hate a company that sells a product some people can’t afford.
I basically agree with the thesis, but I expect a different implementation. The new phones will command premium prices, but maybe a 16GB iPhone 7 and 7 plus will see price drops. Probably not announced at the keynote, but this will show up soon after.
The common argument for sales of Android being higher is that users can’t afford iPhones. With higher prices for new iPhones that reasoning would be expected to result in a further increase for Android, not hurt sales.
Except it is a spurious argument. (That Android uses can’t afford iPhones.) Particularly since we understand most only use their Androids for phone, text, email, and some web browsing. If you factor in security. And the fact that the iPhone camera is about 2-3 years ahead of any Android (read here at MDN, by the way). Factoring in the relatively high amounts of money people are anyway paying their cellular carriers – regardless of device. And considering the longevity of Apple devices. These users would be better off buying an older iPhone than an Android. It is a myth that people who buy Android phones get a cheaper bargain …once you add in all the “hedonstic (i.e., qualitative) pricing aspects of the transactions. I am surprised the critical press is not all over the Android scam. But probably most have the same attitude I have taken over the years: basically, I no longer give a darn what device you want to buy. Get a smart deal or waste your money, I really just don’t care.