AppleInsider Staff
Apple has apparently shown interest in raising the price of its next generation of iPhone models by $100, and has sought approval from carriers to do so, according to one Wall Street analyst.
The company's alleged interest in a $300 starting subsidized price for the so-called "iPhone 6" was revealed on Monday by Jefferies analyst Peter Misek, who said that thus far, carriers have not been receptive.
However, Misek believes that Apple may face a lack of competition in the smartphone space this year. In particular, he doesn't believe Samsung's new flagship Galaxy S5 has the kind of "wow" factor that will hurt Apple.
Misek believes that because of this, Apple will be able to get "at least some of the increase" it seeks, even if the additional costs are split between carriers and consumers. He believes a $50 increase in the average selling price of the iPhone could offset negative gross margins usually associated with an iPhone redesign, which is widely expected to occur this year.
Specifically, Misek estimates that a $50 increase in average selling price would increase Apple's revenues by 2 percent, while earnings per share could grow by 11 percent. A $100 average selling price increase would see revenue spike 6 percent, in his estimation, while earnings per share would benefit an estimated 24 percent.
Misek isn't alone. Last month, Pacific Crest also predicted that Apple will increase the subsidized price of its next iPhone to $299, justifying the change by giving the handset a larger screen than the current 4-inch display found on the iPhone 5s and iPhone 5c.
Pacific Crest's Andy Hargreaves said that he believes a $299 big-screen iPhone would increase gross profit on replacement sales, while also attracting new customers that may have otherwise opted for an Android handset with a larger display.
Well-connected analyst Ming-Chi Kuo of KGI Securities revealed in his own research note last week that he believes Apple will debut two new iPhone models this fall: He has predicted that a 4.7-inch model will still allow for one-handed use, while a larger 5.5-inch model will appeal to customers who have been gravitating toward jumbo-size handsets.
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159 Comments
It's either "It's Peter Misek, what'd you expect?" Or Apple's has lost it's damn mind..
I'm wondering what would justify the price increase. Surely it can't just being going from 4" to 4.7". If true, perhaps it means the new iPhone will have sapphire display, 2GB ram and the base model will be 32GB.
Only Apple could price a phone as high as a macbook. Hopefully enough people will be on the carrier's new no contract option to stick it to these every two year upgrades. Prices have got to cone down on these things soon, or the market will lose steam. No one wants to go out and keep buying new cases/accessories/docks every two years for a phone. the iPad is 499 for a GIANT screen! What is the reason for a phone being 700$ as a base cost?
My guess is that the lower end phones will be significantly reduced to offset this.
Everyone calm down.
If Apple is truly making 2 models, at 4.7" and 5.5", then everyone would reasonably expect the subsidized prices of these two models with 16 GB capacities to start at $199 and $299, respectively.
When did any doubt about this enter anyone's mind?