Why Apple’s next iPhone won’t cost $1,000

Starting price is not the same as price fully loaded.

There’s a new Apple meme afoot that cries for squashing. The way I’ve seen it reported on CBS TV, CNET, BGRSlashgear and Benzinga is that 10th Anniversary iPhone—the rumored buttonless model with OLED screen, steel frame, wireless charging, etc.—will have a starting price of more than $1,000. The source for all these stories: A piece posted Thursday in Fast Company under Mark Sullivan’s byline. The nut graphs:

A special 10th-anniversary edition of the iPhone is expected to be the ultimate iPhone, and it’ll come with a price tag to match—very likely north of $1,000, says a source with knowledge of Apple’s plans.

The price tag isn’t very surprising considering that the 256GB version of the iPhone 7 Plus sells for $969, and the new iPhone 8 is expected to be packed with many more features.

“One source with knowledge” is always suspect, which is probably why Benzinga felt obliged to make it “according to Fast Company sources.” More troubling is that Sullivan compared apples to oranges and none of these reports called him on it. The starting price of that iPhone 7 Plus is $769, not—repeat not—$969.

Apple might very well want to celebrate the 10th anniversary of the original iPhone by introducing a new price tier. Elasticity seems to be working in its favor. In September it raised the premium on Plus-model iPhone from $100 to $120 and sold more plus models, not less.

But to leap in a single bound from $769 to more $1,000? Apple knows better than that, even if the tech press doesn’t.

NOTE: Forbes‘ Gordon Kelly cites a report from KGI Securities’ Ming-Chi Kuo that says that new component costs “will push the iPhone range over the $1,000 price point for the first time.” (emphasis mine).

That I can believe. 

4 Comments

  1. Jonathan Mackenzie said:

    Could work in Apple’s favor. If expectations are anchored around $1000, then $850 looks cheap by comparison.

    1
    February 10, 2017
  2. David Emery said:

    Given Apple’s (usurious) prices for Flash, I could see a 512gb model costing $1k, with $300 of that to max out storage.

    0
    February 10, 2017
  3. George Providaked said:

    Deja vu all over again, Christian Science Monitor 2010

    “… But tech tea-leaf readers and countless media articles predicted all of that. What many did not expect was the iPad’s Goldilocks price tag.

    Last month, PC World turned to Oppenheimer analyst Yair Reiner, who called “for a tablet with a 10.1-inch LCD display and an average sale price of $1,000.” The specs we’re near misses, but the price aimed far too high.

    “All we’ve heard are guesses from analysts, some who claim the tablet will cost as much as $1,000 including carrier subsidy,” wrote Wired.com on Sunday. “We estimate the tablet should cost between $700 and $1,000, placing it somewhere in between an iPhone and a MacBook.” That also missed the mark – unless you count only the deluxe models. …”

    They have no clue.

    2
    February 10, 2017
  4. Fred Stein said:

    I’m more interested in seeing the dual lens feature move down in model size and price to substantially increase upgrade sales in Apple’s IB. Based on PED30’s Feb 2 post quoting CIRP, the iPhone 7+ represents roughly 7% of the US IB. That’s opportunity.

    0
    February 10, 2017

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