While many consumers are eagerly awaiting the release of the next generation Apple smartphone, the price of iPhone 8 could be detrimental to its sales. There has already been considerable discussion in the Apple-following media over precisely what price point the next generation handset will launch at.
But the general consensus of opinion is that the price of iPhone 8 will be in excess of $1,000. While some reports have suggested that the major carriers will offer deals to ensure that consumers do not need to shell out this amount of money, other whispers have been bad news for Apple purchasers.
Some reports have even hinted that the iPhone 8 could cost as much as $1,200 for the base model, particularly as this price was advocated by analyst John Gruber. This must be considered concerning for the Californian corporation, as other analysts have suggested that Apple may struggle to shift the number of units that it is hoping for at the $1,000 price tag.
For much of the past decade, Crispin Odey has been waiting for inflation to rear its ugly head. The fund manager has been positioned to take advantage of rising prices in his flagship hedge fund, the Odey European Fund, and has been trying to warn his investors about the risks of inflation through his annual Read More
Meanwhile, some other smartphones have already arrived in 2017 at significantly lower recommended retail prices than the purported price of iPhone 8. In particular, the OnePlus 5 is already a highly regarded handset that delivers an excellent spec sheet and feature set for a fraction of the likely iPhone 8 price tag.
While the OnePlus 5 will never sell the number of units that Apple will with the iPhone 8, such a device could nevertheless contribute to diminished iPhone sales.
And the Google Pixel 2 is also set to be a serious competitor to the Samsung Galaxy Note 8 and Apple iPhone 8 later this year. Google has been working on ensuring that this handset is a state-of-the-art device, and the phone will also be offered at an affordable price point. With reports generally suggesting that the Google Pixel 2 will retail at $699, it is clear that consumers looking for a relative bargain may opt for this device over the iPhone 8.
The price of iPhone 8 can also be considered surprising given that there has been something of a slowdown in smartphone sales. Despite recovering from the fiasco associated with the Galaxy Note 7, Samsung has already predicted that its reinvigorated sales will not continue into the foreseeable future. The Korean corporation attributed this to increase competition, and while this at least partly refers to the iPhone 8, the Apple handset must also compete in this environment.
Apple sales decline
Indeed, recent data shows that Apple is struggling to retain growth in iPhone sales. In four of the last five financial quarters, iPhone sales have declined, underlining the challenges facing even a company with the brand penetration and recognition of Apple.
Yet the iPhone remains an incredibly important product line for the Cupertino-based company, still responsible for around 60 per cent of Apple revenue. This figure emphasizes just how important it is for Apple to sell as many iPhone 8 units as possible, yet the climate of the smartphone niche has never been more challenging and even discouraging.
This climate is further exacerbated by the growing competition in the mobile marketplace. Companies such as HTC, Huawei and Lenovo are all providing viable smartphone contenders, and the price of iPhone 8 will certainly be elevated in comparison to devices manufactured by these new entrants to the market.
With so many different mobile phones available, it is natural that consumer choice is becoming more splintered, even if the iPhone undoubtedly remains the most recognizable product on the market.
Another problem for Apple with the iPhone 8 is that the company is something of a victim of its own success. While the iPhone 8 will undoubtedly generate a lot of column inches and street buzz, many existing iPhone users will undoubtedly conclude that there is little reason to upgrade, particularly at the $1,000 plus price tag.
Existing Apple phones are more than adequate, and this poses the question for many consumers of why they should upgrade. Many people are perfectly happy with iProducts from several years back, and ultimately not everyone will upgrade without a compelling reason to do so.
In order to provide this compelling reason, Apple must surely deliver a killer app with the iPhone 8. There must be some functionality that really screams to users that they absolutely must upgrade to the latest Apple handsets.
Undoubtedly Apple intends for the wraparound display included in the smartphone to be part of this solution. But as this is by no means a unique feature of the iPhone 8, and indeed products already available on the market deliver this display type, it is questionable to what extent this will be viewed as unique selling proposition.
Indeed, it seems that considering the price of iPhone 8, the prevailing market conditions and the fact that smartphone technology is delivering diminishing returns, that Apple will be reliant on emerging markets such as China for sales growth (if China can really still be described as ’emerging’).
Apple has undoubtedly achieved massive brand recognition in China, and is now shifting vast numbers of units in the world’s most populous nation. But it is possible that the hefty price tag associated with the iPhone 8 will dissuade Chinese consumers from shelling out for an upgrade, even if the nation is increasingly prosperous, with a growing middle-class.
Not all bad news
Nonetheless, despite all of the negative indicators for Apple, the price of iPhone 8 will not necessarily be a disaster for the corporation. The next generation handset promises to be the most innovative and revolutionary for many years, while Apple still retains a loyalty among consumers that is unparalleled in the consumer electronics world.
But this doesn’t change the fact that the recommended retail price linked with the iPhone 8 could have a negative impact on sales.