Despite being a famously secretive company, these days Apple AAPL +1.57% has to accept it cannot lock down the massive iPhone supply chain.
As such leaks flow freely and the latest high profile ones indicate Apple is set to shake up iPhone pricing…
The news comes from two famously reliable sources: Mac Otakara which was the first site to state Apple would remove the headphone jack from the iPhone 7 (though I was first to predict it in 2014). And KGI Securities’ Ming-Chi Kuo who is widely regarded as “the best Apple analyst on the planet”.
Together they complete two halves of an intriguing puzzle: what Apple will do with the iPhone in 2017 – and it is going to cost you.
Filling in its half Mac Otakara says Apple will once again only iterate with its 2017 iPhones and an ‘iPhone 7S’ and ‘iPhone 7S Plus’ will look virtually identical to every iPhone since the iPhone 6 in 2014.
These new phones will add upgraded chipsets, improved cameras and a new red colour option – presumably tied to the (PRODUCT)RED brand – but there’s nothing revolutionary here. It’s more of the same users have experienced since the iPhone 6.
But before you despair, in jumps Kuo who says the iPhone 7S and iPhone 7S Plus will only be the base models with an all new ‘iPhone 8’ at the top. This will feature a completely overhauled design with no home button, an OLED display, wireless charging and more.
This is a smart tactic. It allows Apple to shake up the iPhone brand without risking a backlash from customers wedded to the iconic, yet ageing iPhone design. And yet it also means that for the first time in four generations, Apple will be shaking up iPhone pricing…
Those already struggling to justify the cost of owning an iPhone should probably look away now, because the iPhone 7S and iPhone 7S Plus are expected to retain the current price points of the iPhone 7 and iPhone 7 Plus ($649 – $969), while the iPhone 8 will sit above them both as the new flagship.
It’s pure speculation to say by how much, but with the Plus model currently $129 more at each storage capacity it would seem a $150-200 premium on top of the Plus would make sense and once again increase Apple margins – which have shrunk in recent years.
Would a circa $1200 256GB iPhone 8 seem overpriced? Perhaps, but Apple isn’t concerned about raising prices when it thinks the products deserve it. After all the company just increased base level MacBook pricing by 20% while the 15-inch MacBook Pro has leapt by as much as 50%.
Whether there is still a place for the budget ($399) 4-inch iPhone SE in this new line-up remains to be seen and Apple has already cancelled its 2017 refresh. But one thing is clear: in 2017 Apple is going to be become even more “aspirational” than ever before…