LOS ANGELES — It’s a fact that iPhones have gotten more expensive every year, now topping off at a whopping $969 for an iPhone 7 Plus with 256 GB of storage.
So the 10th anniversary iPhone, the next model, expected to be massively re-designed and packed with state-of-the-art technology, could sell for as much as $1,200 to $1,400, according to some estimates. At which point you've got to wonder, will people actually pay that kind of money for an iPhone?
Yes, and happily, reports Tim Bajarin, an Apple analyst and president of Creative Strategies. “It will fly off the shelves."
First reason, the bragging rights: Bajarin expects the 10th anniversary edition to have an OLED screen (brighter, more colorful), a bigger, thinner body, the best (new and improved) smartphone camera and more graphics and computing power.
It's the extra cost of the bigger, OLED screen, plus expanded storage, that could push the top of the line iPhone to the $1,200 to $1,400 range, he says. Apple is also expected to update the current iPhone 7 and 7 Plus models with similar size bodies and new features.
Of course, many people opt for the smaller, lighter versions — the least storage, and the non-Plus model. For instance, the smaller, 4.7-inch iPhone 7, with 32 GB of storage, is $649 — $320 less than the biggest, most fully loaded current iPhone.
And if you ponder the thought, why not charge more for the ultra-premium model? Apple has a new computer coming out later this year that will sell for $5,000. Hotel rooms that used to cost $100 are now $200 and up. Many people drop $100,000 on Tesla cars when $20,000 Toyota Corollas run just fine.
Unlike all of those, we live with our iPhones. We wake up with them, we spend more time with them than our own families, we put them by our bed at night. A new iPhone for roughly $4 a day for the first year?
A case could be made.
We went out and asked consumers if they were ready to step up and were surprised that we actually got as many yeahs as we got nays.
“Absolutely,” said Ben Sugarman, a bookkeeper in Los Angeles. “It’s worth it.”
“People will come up to me and say, `Wow, I want that new iPhone—and you’ve got it.”
Josh Srinka, who works in insurance, said he was “committed” to buying one, and upgrading from his iPhone 6. “As technology evolves, everything gets more expensive. The iPhone is an integral part of my life. You walk around with a computer in your pocket.”
But student Mayra Alvarado is in the “never” camp. “No way—too expensive,” she says. “It’s just not worth it.”
The first iPhone sold for $599 in 2007, then $399, and eventually we started getting used to subsidized pricing from the wireless carriers that resulted in a price tag of $200 for a two-year contract. This masked the real price of the handset, which was factored into monthly wireless payments.
Now, even though many carriers offer leasing deals, the base price of the iPhones is steep—the 7 Plus starts at $769, while the previous edition is available starting at $699. (Rival phones like the Samsung Galaxy S series or Google's Pixel aren't cheap either—the loaded Pixel XL is $869 and the top of the line Galaxy S8+ is $824.)
“Early adopters are always willing to spend more, to be first,” says Bajarin. “In Apple’s defense, the costs of materials will be high, so this needs to be priced as a premium. And remember, whatever Apple does, regardless of price, they’ll sell out every one they make, and be backordered.”
The new iPhone is expected to be introduced in September, at a splashy event in the San Francisco area.
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