Home Technology What’s The Best Way To Control iPhone 8 Demand? Raise The Price

What’s The Best Way To Control iPhone 8 Demand? Raise The Price

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Apple’s 10th-anniversary smartphone has been doing rounds in the rumor mill under several monikers such as iPhone 8, iPhone X, iPhone Edition, and iPhone Pro. Only Apple knows what the device would be called after launch. For the past few months, the Wall Street has been talking about an ‘iPhone 8 supercycle.’ However, an analyst says Apple might be looking to control demand for the 10th anniversary iPhone by selling it at a higher price tag.

Higher price to curb the iPhone 8 demand

JPMorgan analyst Rod Hall said in a research report (via Business Insider) that the average iPhones currently in use are 6.4 quarters (about a year and a half) old. It means the iPhones in use are older than they have ever been since 2014. Tens of millions of people will be looking to upgrade when the iPhone 8 hits the store shelves. This is one of the reasons the Wall Street has been bullish on the next-gen iPhone.

However, things are not all that great for Apple on the manufacturing front. The upcoming flagship iPhone is rumored to have exciting features like an edge-to-edge OLED display, wireless charging, glass-sandwich design, facial recognition, in-display fingerprint sensor, and no physical home button. The home button is said to be replaced by a virtual function area. Recent reports suggest that the new fingerprint scanner and 3D sensor would enter production only in September, which means the iPhone 8 launch could be pushed back by a few weeks.

Barclays analyst Blayne Curtis said last week that the iPhone 8 would launch alongside the iPhone 7S and 7S Plus in September, but it will be available only in “limited quantities.” Massive demand could push its pre-order delivery estimates to several weeks within minutes after Apple starts taking pre-orders. Rod Hall told investors that a higher price tag would help curb some of the demand.

iPhone 8 to account for 41% of iPhone sales in Q4

Fast Company and KGI Securities analyst Ming-Chi Kuo have previously reported that the 10th anniversary iPhone would cost upward of $1,000. The most expensive current model, the 256GB iPhone 7 Plus, tops at $969. Rod Hall of JPMorgan forecasts the manufacturing cost of the iPhone 8 would be $65 higher than the iPhone 7. According to the analyst, the 10th anniversary flagship model would account for 41% of all iPhone sales during the fourth quarter this year.

The remaining 59% shipments will include the iPhone 7S and 7S Plus and older models. The former of them will be more competitively priced. Rod Hall expects Apple to ship 260 million iPhones this year, which is nearly 23% higher than the 211 million units sold last year. JPMorgan, which has an Overweight rating on Apple, has raised its price target from $142 to $160.

Morgan Stanley analyst Katy Huberty told CNBC Pro earlier this month that the Wall Street was still grossly underestimating the potential of the iPhone 8 supercycle. Huberty argues that in the best case scenario, the iPhone sales could jump 30% in the fiscal year 2018. Most other analysts are modeling a 10% increase in sales after the iPhone 8 launch.

All three new iPhones to feature the same A11 chipset

Citing Chinese-language Economic Daily News, DigiTimes reports that TSMC will start production of the A11 chips in April. The new processor will be built using 10nm manufacturing process, and will power all three new iPhones coming this year. TSMC aims to produce 50 million units by the end of July and more than 100 million units through the end of this year.

Apple has historically upgraded the chips with its new iPhones every year. But the plastic iPhone 5C that came in 2013 had an older A6 processor. The new A11 chip is said to be faster and more energy efficient than its predecessor.

It would feature a water drop design

Though the upcoming iPhone 8 will have an entirely new design, it would pay homage to the original one that revolutionized the global smartphone industry. The new smartphone is rumored to have a “water drop design” to replicate the heavily rounded rear edges of the first iPhone. The Cupertino company is said to use 3D glass cases to make curves around the edges.

The 10th anniversary iPhone is widely expected to sport wireless charging capabilities, but the wireless charging accessory could be sold separately rather than being bundled with the device. According to KGI Securities analyst Ming-Chi Kuo, the iPhone 8 would feature a stacked logic board design to make room for a bigger, L-shaped 2,700mAh battery.

Sources familiar with the matter recently told Nikkei that the iPhone 8’s OLED display will be curved only for visual appeal. It will not offer any significant functions. What’s more, the display will be only slightly curved.

Apple is going to dive into the world of augmented reality (AR) with the next-gen iPhone. Multiple reports have confirmed that the iPhone 8 would feature specialized hardware and software to support AR. Apple has a team of more than 1,000 engineers working on different AR products and games.

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