Mobile Market Report Suggests Apple to Price Latest iPhones at $1,200

Mobile market analysts debate the plausibility of a recent blogger report that prices for new iPhone models that Apple will likely introduce in September will start at $1,200.

iPhones

As Apple prepares to launch its latest iPhone models as expected September or so, a report recently surfaced that the company might start their pricing at $1,200, which is substantially higher than current iPhone 7 prices.

Prices of some of the upcoming iPhone models—which could be called iPhone 8, but more likely will be labeled with extensions of the iPhone 7 naming hierarchy—could even hit $1,399, Apple watcher and developer John Gruber wrote in a July 7 post on his Daring Fireball blog.

The expected higher prices, he wrote, will help differentiate the newest iPhones from existing models while also giving the company the opportunity to sell the handsets at its existing 35 percent margins and in huge quantities based on component supplies.

Gruber wrote that he thinks based on Apple's history, the next models will start at $1,200 and rise to high-end models selling at as much as $1,400. The original iPhone 7 prices started at $649 for a 32GB base iPhone 7 and rose to $969 for a 256GB iPhone 7 Plus, he wrote.

Apple has also been considering using advanced OLED screens in some of its new iPhone models and supplies of those screens could perhaps be hard to come by in the quantities needed by Apple based on its quarterly sales averages of 70 to 80 million handsets. As a result the company could likely raise prices on OLED models to differentiate them in its model lineup and to perhaps tamp down sales to meet screen supplies, wrote Gruber.

It appears that Apple knows that it can't make as many as 40 million OLED iPhones per quarter that it needs to meet potential demand, at least not to start, according to Gruber. "And if that's true, that means it should be more expensive. Not should in any moral sense, but simply because that's how the principle of supply and demand works. When supply is constrained and demand is high, prices go higher. The higher prices alleviate demand," he wrote.

In the meantime, not all iPhones would likely be so pricy. Apple would also probably keep existing iPhone 7 models in its lineup as well, featuring their lower price tags, as it has done in the past.

Several IT analysts contacted by eWEEK have a range of views about Gruber's speculation on the pricing of the upcoming iPhones.

Charles King, principal analyst with research firm Pund-IT, said that because the latest devices come on the 10th anniversary of the iPhone, it "suggests that the company will have something special to talk about. I can easily imagine Apple touting a premium 'anniversary edition' iPhone with all the bells and whistles and a $1,000-plus price."

Such price tags won't deter faithful Apple buyers, he said, many of whom will "willingly pay whatever the company says is the going freight for its products." If even half of those buyers lays down $1,000 plus for a premium edition iPhone, the product will be a success, he added.

That doesn't mean that the new iPhones even must have a big killer app or feature to reach sales success, said King. "Unless the company comes up with something that's remarkable and unexpected, the [next] iPhone may stand as an example where brand and mystique largely trumps innovation and value." 

Gartner analyst Bill Menezes said that while it's impossible to accurately predict how consumers will react over time, his guess is that for several reasons "Apple will be as successful at selling a more expensive version of its already high-end product as it ever has."