Few technology gadget makers manage to keep a higher average selling price and high gross margins the way Apple does on every iPhone, iPad, Mac, Watch, and Apple TV device it sells (not to mention overpriced Watch bands and other accessories which litter every Apple Store).
Word on the streets– and we’ll know in two weeks as the new iPhones will be introduced September 12– is the new high end iPhone will be priced above $1,000. That’s crazy, right? Who would buy a $1,000 smartphone?
Head over to the Apple Store and do a little price shopping. At the low end is iPhone SE which starts at $399. Then, the 4.7-inch iPhone 7 starts at $649, and the premium 5.5-inch iPhone 7 Plus enters at $769.
$769 is a far cry from a $1,000 iPhone. Until you up the storage capacity to 256GB. Now it’s a $969 smartphone, so a premium model iPhone 8 or iPhone Pro or whatever name Apple chooses and priced above $1,000 should not be a surprise.
The lesser iPhones will be priced, well, less, and both the iPhone 7s and iPhone 7s Plus will retain lower than $1,000 prices and both are likely to outsell the more expensive model, as is the case each year.
Move along. Nothing to see here.
Except the future. The slightly-more-than-$1,000 iPhone 8 or iPhone Pro will give us an idea of what Apple will bring to future iPhones.
More Storage – I cannot imagine that many 64GB iPhone 8’s will be sold, but a 512GB model tells the tale of tomorrow. More storage, same pricing.
Face ID – So far, most rumors and leaks put new 3D Face ID face recognition into only the premium iPhone, and not the lesser models which will still utilize Touch ID fingerprint sensor. Why? Apple sells over 200-million iPhones a year and the supply chain just cannot make that many premium sensors and cameras.
Home Button – Only in the least expensive iPhones this year, but all models next year.
Screens – OLED for the expensive iPhone models, standard LCD for less expensive models.
Cameras – The premium iPhone gets the best camera this year which will filter down the line next year; while less expensive cameras get improvements this year, but not the best.
Goodbye 128GB Storage – I hate that Apple does this but it’s exactly how Apple keeps the average selling price and gross margins so much higher than competitors. Expect 64GB to be the entry level storage, with only a 256GB option for the lesser iPhones, and 256GB and 512GB for the premium iPhone.
Extras – Remember, Apple is proud of their products and prices them accordingly, all while the company slow walks new features. Expect faster CPUs, faster RAM and SSD storage, wireless charging capability, glass case with metal frame, and the micro-bezel design only on the premium iPhone. Everyone else will have to wait until next year. I would not be surprised to see the ProMotion display technology from the iPad Pro models to show up on the high end iPhone, perhaps with the iPad Pro’s Smart Connector technology, too.
2017’s iPhone line may break the naming convention tradition, too. iPad. iPad Pro. MacBook. MackBook Pro. iMac. iMac Pro. So, iPhone, iPhone Plus, and iPhone Pro, and kiss the numbering scheme goodbye. If not this year, next year for sure as the iPhone 8 (iPhone Pro) features go down the line to less expensive models.
This is a game Apple plays to ensure that average selling prices remain the highest, and with the industry’s highest gross margins, you can understand why Apple maintains most of the industry’s profits. The same holds true for iPads, Macs, Apple Watch, and Apple TV.
The future becomes more clear September 12.