Heads up, Apple users. A substantial price bump might be coming your way. According to Peter Misek, a Jeffries analyst, Apple has reportedly been in talks with its mobile carriers about raising the price of the new iPhone 6 by $100. While the carriers have turned down the idea, Misek believes that Apple has the potential to push them hard since there are no cutting edge or “game changing” phone devices on the horizon.
Misek believes that the new iPhone, which is set to be released in September, has the potential to be a standout in a market already saturated by undifferentiated handsets. Misek conjectures that with the iPhone 6 being the only “headline-worthy, high-end phone” being launched in 2014, carriers do realize that they could lose customers if the phone was not on offer.
However this presumed price hike does not appear to follow recent consumer trends. According to a new report released by market research firm Gartner, there has been a considerable shift in consumer expectations with respect to the smartphone market. Their research finds that consumers are seeking basic lower-priced handsets, while demand for high-end premium devices is rapidly dwindling. This is especially so in western nations, while citizens of emerging markets still prefer low-end basic Android phones. Such a trend could curb Apple’s potential plans to raise its new iPhone prices.
However, Apple is known for thinking differently. In spite of Gartner’s projections about high-end cellphones, the iPhone 6 is engendering a lot of interest from consumers. If the planned price hike did come to fruition, then the carriers and consumers should expect to foot the bill equally. The iPhone 5S starts at a subsidized price of $200 with a two-year contract. For the iPhone 6, they will have to kick in an extra $50.
However, this rumor remains unsubstantiated and indeed, has raised quite a few eyebrows in Silicon Valley. This is especially so since an increasing number of consumers are seeking monthly smartphone plans to avoid bulky long-term contracts. Without the subsidy that applies strictly with two-year contracts, monthly consumers will have to pay the full cost of the phone, which is a hefty $649 for the latest 16GB iPhone 5s. That could be enough for many cellphone users to seek cheaper options.
According to Apple watchers, the company is likely to continue at the same price point as that of the last six generations of iPhones. Examining recent company trends, 9to5mac predicts that given Apple’s launch of the cheaper iPhone 5c last year, there is a high likelihood that similar lower-priced options will be launched in the near future. Repudiating any talk of higher prices, they say that it is highly unlikely that Apple will detour from their pricing path of the past seven years.
As far as the new model is concerned, Apple is rumored to be launching the phone in two different sizes, a 4.7-inch version and a 5.5-inch version. The smaller one is expected to be launched in September while the larger version is set for the fourth quarter, possibly close to the holiday season. Both devices are supposed to come with 1GB of RAM, the new A8 processor, an improved Touch ID fingerprint sensor and an optical stabilized camera. They are also rumored to be loaded with a new set of features called Healthbook.
With every launch, whether it is a new iPhone, a new iPad or the much-anticipated iWatch, this tech mega power, which is now twice as rich as the US government, always creates frenzied excitement. Will the excitement for the new iPhone be dampened by Apple raising its price or will Apple launch a cheaper version of the 6? The world will find out, come September.
By Monalisa Gangopadhyay