If you think that the iPhone X is expensive, wait till you see the price tag of this year’s iPhone. When Apple launched its flagship iPhone X priced at around $1000, it raised an inevitable question: Is it worth the money? While the iPhone X is not selling as well as expected, popular thought is that the technology used in the iPhone X will reduce in price eventually, like everything else, and that will enable Apple to give its customers a slightly less pricey device.
However, UBS analysts Steven Milunovich and Benjamin Wilson do not agree with this notion. They recently stated that Apple’s flagship iPhone for this year is predicted to cost around $1100.
Their research also suggests that Apple has a strategy in place: To reduce the price curve of the top-of-the-line features, move premium customers up the price range by offering moderately higher prices and establishing higher priced new features while intercepting into the low-end markets with older devices.
As Apple has effectively managed to increase the ASP while reducing the sales by only 1%, this shows that the strategy is definitely working. Also, USB predicts that Apple will maintain a constant influx of new customers by further reducing the prices of older devices. Over the years, Apple has successfully persuaded its customers to increase what they pay for a device from an average of around $600 to $800.
Apple is rumoured to launch three new iPhones this year, 5.8 inch and 6.5 inch OLED iPhones, that are expected to be the successors of the iPhone X and its larger model, along with a cheaper 6.1 inch LCD iPhone. The tech giant is also rumoured to release an iPhone SE 2.
If the rumours are to be believed, it is possible that the new OLED iPhones would cost $1100 or more as the current iPhone X with maximum storage capacity already costs $1149. But the 6.1 inch LCD iPhone and the iPhone SE may provide cheaper alternatives.
The iPhone SE currently starts at $349; so, reducing it to around $300 doesn’t really seem out of the question to attract new users. Apple knows the value of bringing in new people to the ecosystem even as it aims to maintain the premium pricing for most models.