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  • Analyst: Apple Seriously Considering iPhone Price Hike


    $299 may be as low as Apple is willing to go with the next-gen iPhone 6.

    According to published reports Monday, Apple has begun engaging in active talks with wireless firms about the bump-up in price, Peter Misek, a prominent analyst with Jefferies, writes.

    Misek says the new entry-level price could do a lot to calm anxious investors about disappointing profit margins.

    It's unclear if carriers, which subsidize the retail cost of Apple's iPhone and make it up over the course of two-year service contracts, would swallow the increase themselves or pass the higher cost onto customers, says Misek.
    Misek is quoted saying that his "checks" indicate Apple has started negotiating with carriers on a $100 iPhone 6 price increase.

    "The initial response has been no, but there seems to be an admission (by wireless firms) that there is no other game-changing device this year," he continues. "We think Apple might be able to get at least some of the increase, with the additional costs split between the carrier and consumer."

    A $50 ASP (average selling price) increase would offset most of the negative iPhone 6 gross margin impact and remove a major bear argument (on Apple's stock), Misek concludes.

    Source: Investors.com
    This article was originally published in forum thread: Analyst: Apple Seriously Considering iPhone Price Hike started by Michael Essany View original post
    Comments 24 Comments
    1. hitman10's Avatar
      hitman10 -
      lol. I can barley accept paying $1000+13%HST for an iphone.. good luck getting me to drop 1130, on a phone. My 47" Samsung smart 3d tv cost $100 more. Ill just buy a tv and carry it around
    1. PokemonDesigner's Avatar
      PokemonDesigner -
      Pft. I'm moving to the Ubuntu phone as soon as they drop cause I'm tired of apple's bs. Let's just hope the Ubuntu phone is as much of a master race as it is for desktop.
    1. csglinux's Avatar
      csglinux -
      Quote Originally Posted by hitman10 View Post
      lol. I can barley accept paying $1000+13%HST for an iphone.. good luck getting me to drop 1130, on a phone. My 47" Samsung smart 3d tv cost $100 more. Ill just buy a tv and carry it around
      You will end up being the envy of most new iPhone 6 owners, as you will have a much bigger screen :-)
    1. politicalslug's Avatar
      politicalslug -
      I'm not buying this lie at all. The whole point of the 5C was to provide a new device at that magical sub-$100 price mark. For those of us that can afford the increase it wouldn't be a problem, but most people can't. I always drop $399 to get the largest size regardless, but most people don't.
    1. Silverado1987's Avatar
      Silverado1987 -
      I do contract. I wouldn't mind paying $299 but then again that's the most I'd pay for a 16gb
    1. mlee19841's Avatar
      mlee19841 -
      299 on contract for a 16gb yikes
    1. PCYoda's Avatar
      PCYoda -
      According to ZDNet, an iPhone 5S 64GB sells for $849 (full retail) or $200-400 (down payment with contract / equipment payment plan)... and costs $218 to build. That means that the cost to manufacturer is covered by the down payment, and at full retail for the unlocked/TMobile version, it's 74% gross margin.

      Now, I know there are R&D costs and other factors, but realistically, even if Apple paid 2/3rd of that gross margin as development and personnel costs, that's still 25% margin on a product that's one of the best selling products in its category worldwide and domestically.

      Even if Apple's cost went up $100, at $318 cost / $849 list, that's 62% gross margin, and again factoring out 2/3rds, that's still 21% margin.

      Why exactly should carriers and/or customers bear that burden when Apple's profit margins are so monstrously healthy already?
    1. mlee19841's Avatar
      mlee19841 -
      Quote Originally Posted by PCYoda View Post
      According to ZDNet, an iPhone 5S 64GB sells for $849 (full retail) or $200-400 (down payment with contract / equipment payment plan)... and costs $218 to build. That means that the cost to manufacturer is covered by the down payment, and at full retail for the unlocked/TMobile version, it's 74% gross margin.

      Now, I know there are R&D costs and other factors, but realistically, even if Apple paid 2/3rd of that gross margin as development and personnel costs, that's still 25% margin on a product that's one of the best selling products in its category worldwide and domestically.

      Even if Apple's cost went up $100, at $318 cost / $849 list, that's 62% gross margin, and again factoring out 2/3rds, that's still 21% margin.

      Why exactly should carriers and/or customers bear that burden when Apple's profit margins are so monstrously healthy already?
      Good break down. America and in this day and age its all about money.
    1. Carvensno's Avatar
      Carvensno -
      I always go big, every year ever since I started buying a iPhone. $399.00(on contract) ok I can do that since I can sell my old iPhone for the same amount. But adding another 100?? Sound like the board for Apple is getting greedier. Just remember Apple? Were the customer that buys your product, piss off the customer? Customer goes or buys something else from someone else.
    1. bigboyz's Avatar
      bigboyz -
      As the phones become more capable, I would think they should become more expensive. If they raise the price to $299 for a 16GB iPhone, that leaves room to price the lesser valued 8GB phone at $199. I can wait till September to find out :]
    1. iRevival's Avatar
      iRevival -
      I would hope that if they did this they would axe the 16GB altogether and just start out at 32GB. Make the $499 version 128GB since we all know it doesn't cost them anywhere near $100 to double the storage capacity. I'd still drop the $399 on the 64GB, but I'd probably hold off on the 128GB.
    1. mlee19841's Avatar
      mlee19841 -
      Quote Originally Posted by iRevival View Post
      I would hope that if they did this they would axe the 16GB altogether and just start out at 32GB. Make the $499 version 128GB since we all know it doesn't cost them anywhere near $100 to double the storage capacity. I'd still drop the $399 on the 64GB, but I'd probably hold off on the 128GB.
      Going by that mark it wouldn't be 399 for a 64gb if they decide to double/increase prices.
    1. PCYoda's Avatar
      PCYoda -
      FYI - the 16GB model costs $191 to produce - only $27 less than the 64GB model that is priced to a customer at $200 more.

      If Apple increased the price $100 and got rid of sub-64GB models in the "S" series (effectively reducing the price of the 64GB by $100), and left a "C" series priced the same as today, I bet you'd increase the number of "C" products sold, while providing more distinction from the "S" products and a better customer experience to the "S" buyer.

      If they went about the increase in that fashion, I'd be okay with it.
    1. Zokunei's Avatar
      Zokunei -
      I would at least hope this would mean the smallest capacity would go up to 32 GB. There's no reason for them to be charging so much for storage in the first place.
    1. mlee19841's Avatar
      mlee19841 -
      Quote Originally Posted by Zokunei View Post
      I would at least hope this would mean the smallest capacity would go up to 32 GB. There's no reason for them to be charging so much for storage in the first place.
      I feel the same way. 100 bucks extra for the storage hike. But hey I pay it. Even tho it blows.
    1. crouching's Avatar
      crouching -
      Shut up and take my money! I will always own an iPhone even if it cost $500. Its an iPhone!!
    1. buggsy2's Avatar
      buggsy2 -
      Quote Originally Posted by bigboyz View Post
      As the phones become more capable, I would think they should become more expensive. If they raise the price to $299 for a 16GB iPhone, that leaves room to price the lesser valued 8GB phone at $199. I can wait till September to find out :]
      Maybe. But iPhones aren't becoming that much more capable, and everything else electronic drops in price, not increases. Apple probably can get away with it but they'll piss off a lot of fans.
    1. AKCHRIS's Avatar
      AKCHRIS -
      I Get a Free Upgrade so it is no Concern of Mine.
    1. docmagoo2's Avatar
      docmagoo2 -
      Quote Originally Posted by buggsy2 View Post
      Maybe. But iPhones aren't becoming that much more capable, and everything else electronic drops in price, not increases. Apple probably can get away with it but they'll piss off a lot of fans.
      I agree totally. Yeah tech becomes faster and more capable but reductions in price mitigate against device rises. The phone prices maybe should stay in line with inflation or wages rather that sticking an extra 100 on top as apple wants more profit

      Quote Originally Posted by AKCHRIS View Post
      I Get a Free Upgrade so it is no Concern of Mine.
      This may be true, but what if your "free" upgrade suddenly becomes a "$100" upgrade?
    1. 2Jaze's Avatar
      2Jaze -
      Quote Originally Posted by mlee19841 View Post
      Good break down. America and in this day and age its all about money.
      What day and age was America NOT about money? Lol

      I recall when there was NO contract price. It was $600 flat out.

      It is what it is. This is a society where parents give their kids $500 to spend on Jordan sneakers. I had a kid too young to open his own bank account for paypal offer me $3500 for some sneakers I owned.....clearly in society people are gonna pay whatever to get what they want. Consumers as a whole are sheep and will never use the power of their dollars. If everyone said no to the iPhone because of pricing, Apple would be forced to conform just like they did when the consumers demanded larger screens. But nope. The phone will release and sell out as always.