According to rumblings from the rumor mill, Apple’s 2018 iPhone lineup will consist of three new devices. On the low-end, Apple will release a 6.1-inch device with an edgeless LCD display. Above that, Apple will reportedly release a next-gen iPhone X along with a iPhone X Plus with a 6.5 inch OLED display. While analysts seem to be of the mind that the aforementioned 6.1-inch iPhone will be competitively priced, we’ve seen some conflicting reports regarding the second iteration of the 5.8-inch iPhone X.
While most analysts anticipate that the iPhone X will retain its $1,000 price point or even be priced in the $900 range, a new investor note from UBS analysts Steven Milunovich and Benjamin Wilson (via Business Insider) posits a different theory. Specifically, both analysts claim that Apple might actually raise the entry price on the iPhone X this year from $1,000 to $1,100.
Their belief is that “once Apple establishes a price band it typically keeps it, consistent with what we’ve heard from former Apple employees,” the UBS told clients in a note recently.
While nothing regarding iPhone pricing is ever official until Apple executives trot out on stage and make an announcement, the notion that Apple’s second-gen iPhone X might be priced at $1,100, while perhaps hard to believe, is not implausible.
With the 6.1-inch LCD model priced in the $700-$800 range, that gives Apple a bit of wiggle room with regards to pricing the more premium iPhone X. Perhaps Apple’s reasoning here is that users who are looking for best Apple has to offer are willing to pay a few hundred more dollars for an OLED display and perhaps faster internals.
UBS’ research note further adds that Apple’s iPhone pricing strategy incorporates a three-pronged strategy:
- “Cascade top-of-the-line features down the price curve (screen size, camera, etc)”
- “Move premium customers up the price curve with moderately higher prices”
- “Establish higher price bands based on new features while tapping into lower-end markets with older devices”
In other words, with an LCD iPhone catering to the majority of buyers, Apple can squeeze a bit more money out of users intent on buying Apple’s top of the line iPhone no matter what the cost. After all, Apple’s entire business model essentially rests on selling premium devices at a premium price point.