[ad_1]
Two highly respected analysts believe that Apple (AAPL) will be more flexible with its iPhone price this year, and they have their reasons.
On Tuesday, Morgan Stanley's Katy Huberty predicts that Apple will award a starting price of $ 899 to the 5.8-inch successor of the iPhone X that is expected to be launched this year, while charging $ 100 more for a model of 6.5 inches. She also planned (in three basic scenarios) that the 6.1-inch, LCD-based iPhone that's largely forthcoming will have a starting price between $ 699 and $ 769.
For its part, Apple analyst Ming-Chi Kuo think the 6.1-inch iPhone, which unlike the iPhone 8 and 8-Plus is expected to support Face ID and dispose of the iPhone. an end-to-end display, will have a starting price of $ 600 to $ 700. He cites a cheaper display, a lack of 3D Touch support and the use of a single-lens back camera as reasons why Apple will price the phone aggressively.
For comparison, the current iPhone 5.8-inch X has a starting price of $ 999 (it is often higher in foreign markets due to local taxes and / or rates). The 4.8-inch iPhone 8 has a starting price of $ 699, and the iPhone 5 of 8.5 inches, a starting price of $ 799.
Huberty and Kuo seem to be making educated assumptions about how Apple will price its 2018 iPhones, rather than relaying information from sources. However, it is not difficult to understand why Apple might choose to be more lenient with its iPhone price in the fall of 2018 compared to the fall of 2017.
The most obvious reason: the iPhone's volume growth has been rather slow, the expectations of a "supercycle" driven by the iPhone X having failed to materialize. Sales of Apple's iPhone unit totaled 129.5 million between the December and March quarters of the company, an increase of less than 1% over the same period of time. last year.
In addition, sales expectations for this year's iPhones appear to be subdued – especially for successors of the iPhone X. The Japanese Nikkei reported that Apple had announced to 80 million units of its three new iPhones, which is down from the 100 million iPhone 8, 8-Plus and X units planned a year ago. And the Wall Street Journal reported that Apple expects its new LCD iPhone to account for the majority of its new iPhone sales this fall.
All this gives Apple an incentive at a slightly more aggressive price. Another incentive: if more aggressive pricing helped Apple to take part, this would serve to further develop the installed base of the iPhone. And that would help the company to develop its service revenue base.
Apple is coming out of a March quarter in which its service revenues grew 31 percent annually to $ 9.2 billion. The growth of the App Store and Apple Music has been beneficial, as have the payments generated by Alphabet / Google (GOOGL). And this growth, in turn, is in part due to the steady expansion of Apple's installed base of appliances, which Tim Cook has indicated that she continues to grow at a rate double digit
Similarly, the growth of the iPhone installed base increases the number of consumers that Apple can cross with Apple Watch, AirPods, Apple TV, HomePods and other hardware that work well with iOS devices. In the fourth quarter, the segment of reports on other Apple products, which covers the aforementioned devices as well as iPods, headphones and accessories Beats, saw its revenues increase by 38% to 3.95 billion dollars.
And while the growth rate of the other products segment is expected to slow over the next few quarters, it could very well stay at a double-digit pace, given the current momentum of Apple Watch and the future. AirPods and the fact that Apple plans to launch new "studio-quality" headphones in 2019 and an AR / VR headset in 2020.
We can not know for sure if Apple is reshaping its iPhone pricing strategy until this fall. However, for a company that is facing a high-end smartphone market and has made a lot of progress in getting more revenue from its smartphone base through complementary hardware and value-added services, the argument for a redesign is pretty strong.
Source link
