Why Apple might rethink its iPhone pricing a little

“Two well-respected analysts think Apple will be more flexible with its iPhone pricing this year, and they have good reasons to think so,” Eric Jhonsa writes for TheStreet.

“On Tuesday, Morgan Stanley’s Katy Huberty forecast Apple will assign an $899 starting price to the 5.8-inch iPhone X successor that’s due to launch this year, while charging $100 more for a 6.5-inch model. She also forecast (in three base-case scenarios) that the 6.1-inch, LCD-based iPhone that’s widely to arrive will feature a starting price between $699 and $769,” Jhonsa writes. “Apple analyst Ming-Chi Kuo thinks the 6.1-inch iPhone, which unlike the iPhone 8 and 8-Plus is expected to support Face ID and feature an edge-to-edge display, will have a $600 to $700 starting price.”

“It’s not too hard to understand why Apple could choose to be more lenient with its iPhone pricing in the fall of 2018 relative to the fall of 2017,” Jhonsa writes. “Apple’s iPhone unit sales totaled 129.5 million between the company’s December and March quarters, an increase of less than 1% from the year-ago period… Should more aggressive pricing help Apple take share, it would serve to further grow the company’s iPhone installed base. And that would help the company grow its Services revenue base.”

Read more in the full article here.

MacDailyNews Take: We’ll know for sure soon enough, but we expect Apple’s 6.1-inch LCD iPhone to be priced well – Apple are epxerts at pricing products, in general – and sell very, very well.

SEE ALSO:
Ming-Chi Kuo: Next-gen Apple iPhones to feature lower pricing; all models to launch in September – June 4, 2018

11 Comments

    1. Cheap _is_ part of the solution. That’s why the iPhone family includes a red-headed stepchild old small screen phone at a low price point. Apple would not succeed if it only sold gold plated devices.

      Thankfully (years after every other company did it) Apple finally realized that 3 different screen sizes were needed, with multiple price points for each. I am not impressed how much Apple overcharges for memory in order to spread out those price points, but that’s Apple’s brand of capitalism for you, taking advantage of a captive market when Apple doesn’t eve know what to do with the money overflowing its offshore coffers. Apple is also trending toward penny pinching on components that the users do not see — selecting lower capabilty batteries, for example, than what is available on the supply market for only a few % more cost.

      It remains to be seen if Apple thinks its $1k notch experiment succeeded. I suspect that profitability of the X isn’t as good as the 6, 7, or 8 and may never be. Apple can’t reduce phone prices if Samsung doesn’t want to play ball. The OLED screen isn’t a tech advantage, it’s actually a liability because Apple has about zero ability to design or manufacture OLEDs, they are beholded to a sole source supplier. If it was easy, then there would be more competition. There is not.

      If the pricing trends of other tech products is any guide, prices should not change much over time, but capability has to increase every generation to be competitive in the marketplace. Apple may not drop prices but they will have to work hard to offset the increased OLED costs which frankly doesn’t result in a better performing phone.

      I don’t think I have to reiterate how Apple’s annual iPhone updates are the reason for continued sales success, whereas Apple’s stupid decision to not offer at least biannual refreshes on Mac hardware is destroying that side of the business. That is bad management in my opinion. Apple doesn’t need to consider iPhone pricing changes, they seriously need to reduce prices on antiquated Macs and roll out new models across the board.

  1. People are tired of not being paid well, then having to spend $800+ just to be one step behind “the Jones.” I hope Apple is starting to realize this. If not, just another reason why their magical kingdom of Zeal will fall soon enough.

    >

    1. Except that there is no secret iPhone club handshake, no knowing nods with others of being in the fruity cool club, no audible gasps of jealous co-workers seeing the Apple latest anymore.

      People like a great phone and for the most part could care less about “keeping up with the Joneses” who aren’t looking or caring about what you’re using anyway. For the most part most people are too into their own phones to notice what anyone else is using. People upgrade when they’re good and ready and can afford it. The bloom is off the rose gold now.

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