Could Apple Inc. Charge $1,200 for the iPhone 8? (AAPL)

The idea of a $1,000 iPhone risks sticker shock, but could Apple expect to shell out $1,200 for the iPhone 8?

These 3 Factors Will Make or Break Tuesday’s Report From Apple

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We know that Apple Inc. (NASDAQ:AAPL) is planning something special for the iPhone this year. On the 10th anniversary of the iPhone’s release — and with sales slowing — the iPhone 8 is expected to be a very big deal.

Could Apple Inc. (AAPL) Charge $1,200 for the iPhone 8?
Source: Apple

Early in the year, rumors began circulating that we could be looking at a $1,000 iPhone in September. But could the sticker shock be even worse?

Speculation is flying that the iPhone 8 price could blow past $1,000 to start at $1,200 or more.

The Case for a Four-Digit iPhone

Apple has been pretty consistent with the pricing of its iPhones. As a result, the expectation has been for a new model to start at $649. The company has played games with variables like storage — lowballing the base model so that consumers pay extra for a more reasonable amount, thereby effectively boosting the starting price for many buyers. But $649 has been the expected starting price going back to the iPhone 4 in 2011.

The larger iPhone Plus started at $100 more until the iPhone 7 Plus, when AAPL tacked on an additional $20 (apparently to cover component costs of its dual camera system). That put its most expensive smartphone at a $769 starting price.

Smartphone competitors have largely stayed in the same ballpark. However, this year, Samsung Electronics (OTCMKTS:SSNLF) set the price for its new Galaxy S8 and Galaxy S8+ smartphones at $750 and $850, respectively.

That move added fuel to a rumor that had been circulating about the iPhone 8 price. Namely that Apple was planning to release a $1,000 iPhone. The leap from the $769 of the iPhone 7 Plus to $1,000 was big. However, put in the perspective of a Galaxy costing $850, that premium iPhone 8 price suddenly didn’t seem quite so stratospheric.

Could Apple be planning to jack up the iPhone 8 price even higher, though?

Speculation That the iPhone 8 Price Could Hit $1,200

Various Apple rumor sites are now debating the possibility that the iPhone 8 price could actually start as high as $1,200.

This latest conjecture began with John Gruber of Daring Fireball.

Gruber initially started the conversation with the idea that Apple could be positioning the iPhone 8 as an “iPhone Pro” and pricing it at $1,500. He subsequently revised his starting price to $1,200 and laid out the case for that high price tag. Among his arguments are the idea that AAPL won’t be able to produce the iPhone 8 in mass quantities, so it will take full advantage of the premium pricing to charge accordingly.

He also points out that besides the iPhone 8 (or iPhone Pro), AAPL still will offer the iPhone 7s in the fall. Apple can stick with the traditional $649 there, so it runs no real risk of pricing potential new iPhone buyers right out of the market.

There was some speculation that Gruber had been fed the information by Apple as a way of gauging public reception and cushioning the blow. He is known to be close to senior executives, and was also the one who nailed the Apple Watch Edition’s $9,999 starting price. However, Gruber has denied any insider knowledge.

Not everyone is convinced that Gruber is right this time. Charging nearly double the price of a current entry-level iPhone is a bold move and risks disappointing iPhone 8 sales. Cult of Mac is in the camp that still thinks a $999 iPhone 8 price is more likely, at least for the base model, noting that in a reader poll, almost half of respondents said they would not pay four figures for the iPhone 8, while 30% would only reluctantly shell out for a $1,000 iPhone.

As with all things related to the next big release, we’ll have to wait until September to learn the actual iPhone 8 price.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/07/could-apple-inc-charge-1200-for-the-iphone-8-aapl/.

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