With Apple’s Gather Round event less than a week away, Keybanc Capital Markets analysts have issued a new research note to clients telling them the iPhone 9 price will be much higher than expected. Next week, Apple will unveil three new iPhones: a 5.8-inch iPhone XS, a 6.5-inch iPhone XS Max, and a 6.1-inch LCD iPhone 9. While the OLED iPhone XS and XS Max would be ultra-premium devices, past reports have indicated that the iPhone 9 price will be in the same range as last year’s iPhone 8 to cater to budget-conscious consumers.
A big screen is a good enough reason for a higher iPhone 9 price
The iPhone 9 would retain the LCD screen, but it is said to have an iPhone X-like bezel-less design with a display notch. It will also get the Face ID technology, which was one of the reasons the iPhone X was so expensive. TF International Securities analyst Ming-Chi Kuo has told investors the iPhone 9 price would be in the same range as the iPhone 8 because Apple was making a few compromises to keep its costs down. The iPhone 9 would lack the OLED display, dual cameras, 3D Touch, and will launch with only 3GB RAM.
Keybanc analysts said in a research note (via Barron’s) that one of the most important features for people is bigger screens, and they are willing to pay more for them. That’s a good reason for Apple to sell the iPhone 9 at a slight premium. Keybanc analysts believe this year’s iPhone cycle will be even bigger than the iPhone 6 cycle in 2014. The research firm added that screen size had been the “lone feature” that was consistently driving “both volume and pricing power” over the last six years.
It was clearly evident in the iPhone 6 cycle when the larger iPhone 6 Plus spurred a massive upgrade. And then again with the iPhone X, where a larger screen in a similar-size form factor “drove strong pricing power,” said the research firm. The analysts don’t expect strong growth in the iPhone unit volume because the premium market is saturated.
They expect the iPhone XS and XS Max to be priced at a premium to last year’s iPhone X. The iPhone 9 price will be “at a premium to the blended ASP for the iPhone 8/8+.” It should lead to a significant jump in the overall iPhone ASP. If you couldn’t understand the research firm’s lingo, the iPhone 9 price will be somewhere between the iPhone 8 ($699) and iPhone 8 Plus ($799) for the base model.
It means the device could be priced at around $750 for the base model, much higher than Ming-Chi Kuo’s prediction of $600-$700 price range. Keybanc analysts believe consumers don’t care much whether a phone has an OLED or LCD screen. Both the display technologies “offer high quality experiences.” If you look at the technical aspects, OLED is superior to its LCD counterpart in color accuracy and energy efficiency.
If Keybanc’s reasoning is to be believed, the iPhone XS could start at $1,000 and the larger iPhone XS Max could sell at a starting price of $1,100. In contrast, Ming-Chi Kuo has told his clients that Apple has worked hard to resolve the issues that pushed up the iPhone X price last year. Kuo expects the iPhone XS to start at $900 and the iPhone XS Max at $1,000.
Are these the actual prices of the upcoming iPhones?
German site Macerkopf has shared the pricing details of all three upcoming iPhones, and the prices are much more reasonable than Keybanc suggests. Two sources familiar with Apple’s plans told Macerkopf that the iPhone 9 price in Europe would be the same as last year’s iPhone 8 at the time of launch. The iPhone XS would occupy the price point of the iPhone 8 Plus while the iPhone XS Max will have the same price tag as the iPhone X.
According to the German publication, the iPhone 9 would cost €799, the iPhone XS €909, and the iPhone XS Max €1,149. If it turns out to be true, the US prices should be $699 for iPhone 9, $799 for iPhone XS, and $999 for the iPhone XS Max. All the prices are for the base model with 64GB storage. The 256GB model would cost another €170 or $150. There will also be a 512GB model, but its pricing is not yet known.
In terms of specs, the iPhone 9 would borrow the bezel-less design and Face ID technology from the iPhone X. But it will have only a single camera on the back. The iPhone XS and XS Max would sport dual rear cameras and a higher 4GB RAM. Ming-Chi Kuo predicts the iPhone 9 would arrive in both single-SIM and dual-SIM variants. But the dual-SIM model might not be sold in the US due to resistance from wireless carriers.
Kuo believes the iPhone 9 will be the most popular iPhone this year because of its premium design and relatively lower price tag. All the three iPhones coming next week will run the A12 chipset based on the 7nm FinFET technology. They will also run the iOS 12 software out of the box.
The iOS 12 brings performance and stability improvements along with new features such as Siri shortcuts, better notifications, an improved Control Center, Digital Health, and a revamped Stocks app. The Digital Health feature will allow users to monitor and control the time they spend on their iDevices as well as within individual apps.
