Predicting Apple's New iPhone Pricing

Posted by Matt Birchler
β€” 2 min read

Apple is primed to release 3 new iPhones this fall, and based on many rumors and leaks, we're pretty sure we know what we're getting:

  • lower cost 6.1" iPhone with X design, but LCD screen and larger bezels
  • iPhone X successor with 5.8" screen and spec bump
  • iPhone X Plus with 6.5" screen

Before making my official guess, let's look at the entry level prices for Apple's 3 iPhones today:

  • iPhone 8: $699
  • iPhone 8 Plus: $799
  • iPhone X: $999

Typically, Apple has kept pricing about thee same from year to year, but I expect more changes than normal this year, as the iPhone X really blew up the standard pricing structure last year. Here are my official guesses:

  • 6.1" LCD iPhone: $749
  • 5.8" OLED iPhone: $999
  • 6.5" OLED iPhone: $1,099

I suspect the baseline iPhone will come up in cost another $50 as the new design and larger screen will add perceived value and will continue to increase the ASP for the iPhone line in general. While the iPhone X sold well in 2018, I suspect this new baseline iPhone will blow the doors off and lead to a notable increase in unit sales this fall. Making $50 more per phone will do wonders for Apple's revenue and ASP without making individual users feel like they're getting shafted. Oh, and if this thing comes in some cool new colors, people are going to love this thing.

And then there's the higher end phones, which is a little tricky. If you asked me in the Spring, I would have guessed the iPhone X model would start at $899 or even as low as $799. After all, Apple pitched the iPhone X as a preview of the future of iPhone. It was something they suggested they were selling a year before it was really ready to be mainstream. Thus the super high price, and presumably, a phone that would cost less in coming years.

Given that Apple seems to have no problem selling their $999 phone today, I don't think they're going to drop the price at all anymore. At this point it feels like they'd be leaving money on the table by dropping the price. I suspect their feeling is that if people were willing to pay $899 then they're also willing to pay $999.

As a random note, the full cost of all 3 baseline iPhone models in 2017 was $2,497. If my prices are right, the cost would be $2,847, which is a pretty dramatic increase.