Everyone knows that Apple Inc. (NASDAQ:AAPL) is looking to leverage the 10th anniversary of the iPhone to boost sales. The smartphone market is maturing, and last quarter’s record iPhone numbers were the first positive news in a while. For 2017, the company wants its new iPhone to make a huge splash and have people camping outside its stores waiting for one.
But no matter how cool AAPL makes the iPhone 8, would people pay $1,000 or more for one?
iPhone 8 Rumors
Over the past several months, rumors have been building that AAPL is going all-out with the iPhone 8. After three years of looking essentially identical — good luck telling an iPhone 6 from an iPhone 7 without actually powering it up — the iPhone 8 is going to look different.
Just how different is where the rumor mill comes in.
However, the money is on Apple dropping the aluminum back in favor of an all-glass design. Making the new iPhone pop even more is the expectation of an OLED display that ditches the bezels and even the Home button.
A new iPhone that looks completely different from the models of the previous three years is expected to boost sales as Apple fans trade in their old phones. There also has been speculation that AAPL will take advantage of the 10th anniversary to charge a premium for the iPhone 8.
But a new report suggests that could be higher than expected.
Is the Market Ready for a $1,000-Plus iPhone?
Fast Company reports that AAPL isn’t just looking to boost sales with the iPhone 8, it’s looking to cash in on upgrade fever.
Citing a source with “knowledge of Apple’s plans,” Fast Company says the 10th anniversary iPhone 8 will indeed be the all-glass design (with a stainless steel band) and OLED display. At 5.8 inches, it will be larger than the iPhone 7 Plus. It may even have a cooler name than iPhone 8: “iPhone X” is being thrown around.
And according to Fast Company’s source, it will likely start at over $1,000.
In comparison, previous iPhones have traditionally had a $649 starting price. When the Plus models were introduced, AAPL started those bigger iPhones at $749, boosting that to $769 for the iPhone 7 Plus.
Can Apple Pull Off Such an Expensive iPhone 8?
There’s no question that $1,000-plus is a very expensive smartphone. That’s basically $250 more than AAPL has ever charged.
Even Samsung Electronics Co Ltd (OTCMKTS:SSNLF) only hit $849 with its flagship (and doomed) Galaxy Note 7. That phablet has a great deal in common with the iPhone 8’s expected features, including an oversized OLED display and wireless charging.
However, Apple is undoubtedly emboldened by the success of its more expensive Plus phone in the last quarter. Despite carrying a premium (and the iPhone 7 Plus price hike), in the previous quarter, sales surged for the larger, more expensive iPhones. The iPhone 7 Plus is estimated to have accounted for 40% of iPhone 7 sales worldwide — double the share of the iPhone 6 Plus.
Fast Company’s source says Apple will also offer the iPhone 7s and iPhone 7s Plus in 2017. That positions the iPhone 8 — or iPhone X — as a true premium offering. Anyone who wants a new iPhone would still have the option of buying the standard offerings (which would continue to be among the best smartphones on the market).
But for those with deeper pockets who truly want to make a statement, then the $1,000-plus 10th anniversary iPhone 8 will be there.
It’s a risky strategy, but it could pay off big-time for Apple.
As usual, this early in the year, speculation about AAPL’s new iPhone plans is just that — speculation. So stay tuned as more details leak and we get a closer to a definitive picture of what the company is up to for fall 2017.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.