Owning the hottest new tech product is never cheap. However, speculation that the Apple iPhone 8 price could start at $1,200 has some of the biggest Apple fans gasping for air. Considering the current high point for pricing in Apple’s lineup, the iPhone 7 Plus 256 GB, is $969; a jump up to $1,200 as a starting point is a pretty significant leap. But is this speculation legitimate or just some news to fill the summer months?
John Gruber is one of the main analysts driving this pricing speculation. He’s not some random internet commenter, either. Gruber is well known in the tech world and regularly hosts Apple executives on his podcast. Apple Watch fans may remember him as the guy that correctly predicted the gold Apple Watch would cost more than $9,999. As well, he’s not alone in this price hike prediction. Goldman Sachs, Fast Company, and Credit Suisse are all expecting a noticeable price increase.
Where there’s smoke, there’s fire. With so many analysts predicting an Apple iPhone 8 price increase, potentially starting at over $1,000, it’s hard to ignore the chatter. But, what could be driving such a drastic increase?
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Talk has been growing lately that Apple is facing production issues leading up to their iPhone 8 launch. The main problem seems to be with the Touch ID sensor. With the iPhone 8, Apple is attempting to embed the Touch ID sensor underneath the OLED display. Unfortunately for Apple, reports are suggesting that the reliability and responsiveness of the Touch ID sensor is being negatively affected by its new location under the screen. The situation is sore dire that Apple may be forced to delay the launch of the iPhone 8 or move forward without a Touch ID sensor if the issue can’t be resolved in the coming weeks before production ramps up.
Speaking of OLED screens… Until now, Apple has used LCD screens in their devices. OLED screens offer a better viewing experience for users but also cost more to produce regardless of whether they have a fingerprint sensor embedded underneath. Right there, simply by upgrading the screen, Apple has increased the manufacturing cost of the iPhone and consumers can expect to see that increase reflected in the Apple iPhone 8 price at the counter.
As if all of that wasn’t enough to put some serious upward pressure on the price of the newest iPhone, let’s add in some speculation that Apple isn’t able to procure enough OLED screens to meet their expected demand. Analysts anticipate that the iPhone 8 launch could be the most successful in the history of the iPhone. If you turn to page 2 in your “Economics 101” textbook you can see what happens when supply is low and demand is high. Prices increase to help manage demand.
Let’s take a moment to recap… Apple is essentially facing a perfect storm as they draw closer to the expected announcement of the iPhone 8. First, there are suspected production issues with the new placement of the Touch ID sensor. A launch date delay is a very real possibility at this point. A delay into late November or even December would put some serious pressure on the iPhone 8 supply. There’s your first potential cause for a price increase.
Second, it’s widely expected that Apple will use an OLED screen in the new iPhone 8. OLED screens are great, but they cost more than LCD screens. There’s another cause for an Apple iPhone 8 price hike.
Finally, even if Apple is able to get the iPhone 8 into stores on time, there is likely to be a supply crunch simply because they cannot secure enough OLED screens to meet expected demand from consumers in the heat of the holiday shopping season. When demand is high and supply is low, consumers better be ready to reach a little deeper into their wallets.
If you’re looking at picking up the new iPhone on launch day you might want to start scrimping and saving now. If the rumors of an Apple iPhone 8 price increase are true then having some extra money lying around will come in handy.