“Some are predicting Apple’s iPhone might have gained an upper hand against its most ardent competition because some feel the companies have launched underwhelming updates to their respective flagship smartphones (read: Samsung Galaxy S5),” Andrew Tonner writes for The Motley Fool. “The stage is clearly set and expectations are outsized for Apple’s iPhone 6. And it appears Apple is also well aware of this as word recently broke that Apple, in discussions with carriers, is exploring the possibility of hiking the price of the iPhone 6.”
“According to reports initially circling back to Jefferies analyst Peter Misek, Apple has pitched the idea of starting its iPhone 6 at a subsidized price of $300 when the device debuts later this year,” Tonner writes. “If Apple were to successfully gain the support to a significant enough portion of their telecom partners to accept this supposed $100 price increase, Misek estimates that in a so-called ‘worst case’ scenario, Apple would see its unit shipments fall 10% due to the price increase.”
“But baking in the effect that that incremental $100 per device, Misek’s model suggest that Apple’s EPS would still increase 14% overall, even after the 10% drop in unit sales,” Tonner writes. “On a more positive note, he also models the financial impact of the $100 price hike if iPhone shipments were to remain unaffected by this development. In this scenario, Misek’s models claims that Apple’s EPS would grow 24%.”
Tonner writes, “If Apple were able to pull this off, it would certainly signal that it’s hand is stronger than most of us realize today, either because the new iPhone will feature some new truly game-changing technology or that this year’s other major smartphone launches are perhaps performing substantially worse than expected.”
Read more in the full article here.
MacDailyNews Take: As we wrote on Monday:
Exotic materials, esoteric manufacturing processes, unparalleled build quality, and seamless access to unequaled ecosystems that patent-infringing imitators simply cannot match is worth well more than $100.
Related article:
Analyst: Apple looks to raise prices by $100 for iPhone 6 – April 14, 2014
The price increase is probably for the 5.5″ iPhone, the 4.7″ model will keep the same price as the current 5s. Makes sense that 5.5″ model will be $100 more across all the models.
That was my thought as well.
Apple doesn’t normally jack up the price, unless it is a different bigger model (like 17″ MacBook Pro). Normally they like to see what improvements can be made while holding the price steady.
We know its not all about market share but risking losing more would be foolhardy in my book so I make you right, overall prices might go up but equivalent phones probably stay pretty much as they are.
that sapphire display costs are apparently not going to be subsidized… LOL
I still hope of those supposed displays arriving on the 6…
But i can see how an Apple phablet might be the way to go if you decide to skip owning an iPad…
Peter Misek will stir any faeces for his moment in the sun…
More fabrication moving to the US? I would pay a premium for that.
right… for whatever reason… Intel still either refuses to build a competing architecture or Apple does not want to pay Intel prices for their A8/A? SOC…
Seems like a good deal for both parties… but who knows what’s going on behind closed doors
Just shut up and take my money!!!!!!!!!!
This is factless guessing by an ANALyst. He has no first hand info on what pricing negotiations are going on. Apple may have the upper hand. But to maintain it, raise prices? I don’t think so. Apple will figure out a way to price it so that it grabs even more share. When you consider the future is global sales, raising prices makes no sense. Why would they raise the price to a point that forces buyers to go to cheaper non-Apple options when all they need to do is maintain price, control the costs and rake in even more profit – which is currently higher than all other smartphone suppliers combined. Why rock that boat? This guy is off. Way off.
I disagree. I think he is correct.
IF Apple ever does release a large phone, they will most certainly be idiots NOT to charge premium for such a phone.
Let us not forget; phablets are still marginal players in the smartphone market space (contrary to what Samsung would want you to believe). In order to enter this segment, Apple can only come from above. As an aspirational brand across the board, Apple has the best chance of cleaning up the phablet segment by entering with a high-price, premium product that would severely depress margins for the competitors.
Chasing the market share by reducing the margins would simply be admitting that Samsung, LG, HTC and others are correct. They are not.
I will be very surprised if Apple does release the large-screen iPhone, and if it ends up costing $650 (for the base model), rather than (at least) $750 ($300 with carrier subsidy).
OR, Apple may get the carriers to eat the increase and keep the prices to the consumer as is.
Tablet computers were around for many years before the iPad came along. MP3 players were around for many years before the iPod was introduced. The success or failure of large-screen android phones has nothing to do with the potential sales of larger screen iPhones.
Fantasy opinions about fantasy alternatives of fantasy results of fantasy actions. This is even more vaporous than the tripe “analysts” usually dish out.
If Apple simply fitted the base model with 32GB of storage, that alone would have otherwise cost customers $100 over what they used to pay for a 16 GB version.
Apple could raise the price of the entry level iPhone 6, but still offer similar value for money to previous models.
But you could buy one of those S5’s & GET ONE FREE!!! Because you know they are just SO GREAT!!
Apple (NASDAQ: AAPL ) wasn’t the first company to offer a smartphone with a fingerprint scanner, but it seems to have ignited a trend. Following the debut of the iPhone 5s, Apple’s rivals — HTC and Samsung (NASDAQOTH: SSNLF ) — have chosen to include the technology in some of their flagship models.
Like Apple’s iPhone 5s, Samsung’s latest phone, the Galaxy S5, features a fingerprint scanner built into the home button. Unfortunately for buyers, reviewers have almost universally trashed the feature, concluding that it’s basically worthless. While that could damage Samsung’s reputation, the company that could suffer the most is eBay (NASDAQ: EBAY ) .
A useless feature
With S5 finally available for purchase, most of the traditional tech outlets are out with reviews of Samsung’s latest flagship. While the final scores differ, almost all of them agree on one thing: When it comes to the fingerprint scanner, Samsung blew it.
FUCK YOU ScamScumOmungus!
“MacDailyNews Take: As we wrote on Monday:
Exotic materials, esoteric manufacturing processes, unparalleled build quality, and seamless access to unequaled ecosystems that patent-infringing imitators simply cannot match is worth well more than $100.”
Just like a Rolex; not for everyone.
Apple – “Think Differently”
to
Apple – “Only if you can afford it”
we know which category you fall into.
If the end product is great, i have no problem paying the extra hundred bucks. But I also think Apple will continue making a plastic “C” model made with updated previous model innards to satisfy a diffrent market. I don’t see it as an either/or situation, or a lose/win proposition.
With Apple’s trade in program, many customers will be paying less than have ever paid for an iPhone.
…that Apple, in discussions with carriers, is exploring the possibility of hiking the price of the iPhone 6
OR maybe these dummies are REALLY talking about the price of a PHABLET version of the iPhone 6, in which case DUH-A-DUH it’s gonna cost more!
I am no officially dead sick of this idiotic, poorly researched subject. F*k you, lazy analcysts.
I agree. They don’t know squat. Why would Apple charge a premium? To sell to the small portion of buyers that are already Apple customers that are willing to part with the extra money. Or will they offer the more distinctive model (which one would think would cost more) at the same price as the 5s and it sells in droves? Luring more non-Apple buyers. ANALyists talking BS.
I’m with you MDN.