Apple has reportedly been negotiating a possible $100 price increase for the iPhone 6 with carriers, according to Jefferies analyst Peter Misek.
Initial response from carriers has been "no"; however, Misek says carriers realize that there is no other game-changing device this year and Apple may be able to negotiate a lesser increase. A $50 bump in price would offset the gross margin impact of the new device.
"The possibility may at first seem far-fetched in light of investor concerns regarding possible carrier subsidy and handset price cuts due to smartphone saturation and lack of differentiation," Misek comments. "But we think this general lack of differentiation could be the reason why Apple may be able to get a price increase. Carriers realize that the iPhone 6 will likely be the only headline-worthy high-end phone launched this year and that they will lose subs if they do not offer it."
Carriers would likely have to take much of the hit themselves; however, the growth of equipment installment plans would pass the cost to the consumer.
Misek says, an ASP increase could offset iPhone 6 gross margin headwind:
"Our prelim iPhone 6 BOM est indicates GM could be up to 450bp lower than the 5s (pricier display/AP partially offset by general 5%-10% price concessions). Our current estimates assume a 430bp decline, which we feel is conservative unless some of the components run into yield issues. We estimate a $50 ASP increase on the iPhone 6 would raise GM by 375bp and $100 by 700bp so a $50 ASP increase would offset most of the iPhone 6 COGS pressure."
A $50 price increase would raise earnings per share by 2%/11% and a $100 increase price bump would raise revenues EPS by 6%/24%.
Would you be willing to pay more for a larger iPhone 6? Let us know in the comments!
Not really, it's greed. The market is reaching its saturation point for high end phones and the only way they'll keep or improve their profit margins is to take more of your money.
Not as bad as I ever was living with the same shit slightly paying more for plastic toy and keep dropping it from trying to use one hand and keep believing in wannabe galaxy instead of premium quality that can't be beaten. Kudos to Samsung for not explaining why they keep NIT explaining why they keep increasing size I like, I'll even love it when it finally doesn't fit a single pocket. That's how we roll.
I don't mind paying even $200 more, I am an iSheep. whatever Apple says I would do, I belong to this cult ever since the beginig. Frankly I've been brain wash ever since the first iphone came out. So Go A get Apple raise it $300 more if you want, K come and Joing us, you'll like it in this Apple Cult, I can see you are an iSheep like me.
I don't mind paying even $200 more, I am an iSheep. whatever Apple says I would do, I belong to this cult ever since the beginig. Frankly I've been brain wash ever since the first iphone came out. So Go A get Apple raise it $300 more if you want, K come and Joing us, you'll like it in this Apple Cult, I can see you are an iSheep like me.
You all are lucky to get this if you're with tmobile. I have bought newer iPhones by the year (least cost except 5c) all thanks to jump and cheaper plans they made, but even if apple does raise the price, no problem, I can just ask for a raise at my job, my boss will do that, problem solved iFans and samsheeps. Spread the word.
It would need compelling new features, including being unlocked from carriers—I buy my iPhone(s) from Apple because here in Japan ALL carriers lock the iPhone and will not unlock even when the 26-month contract is completed and I need unlocking for travel overseas. At $700, three unlocked iPhones is just about doable, at $800 or $900 it would not be, especially when stacked up against some fairly nice unlocked Android phones for 1/4 the price. As a 30-year Apple "veteran" it pains me to write that I might consider Android over Apple, but ....
YES!!! Hurry up with the 5.5/5.7 model, (or better yet, make it 6.25 like i told them (Apple) a year ago) and start releasing in April/May every year, instead of near the end. ...6.25 is half way between the i5 and the iMini.
Let's see how Samsung copies this time! Apple may be losing some market share due to all the el cheapo android phones out there, but they are having increased profits compared to the rest!
Assuming two versions of the iPhone 6 is out, 100$ for a bigger screen, yes possibly. But for me to get the iPhone 6, it would have to offer more than just the screen size over the 5s. 128Gb and 256Gb storage for instance, a new faster CPU with better graphics card. 802.11ac wifi.
Active dual SIM would be a winner with travellers like me.
In other words, yes it's possible I'd pay extra for a bigger size screen IF and ONLY IF the iPhone 6 offers features interesting enough to make me upgrade. I'll pay more for storage before screen size though.
This would have to be a DRASTICALLY different phone to justify Apple to raise the price. Having tweaked features of the iPhone 5S along with a larger screen just won't cut it with me.i Love my 5S, but if the next iPhone is just a freshened larger version, then I'm going to wait for the iPhone 7 or 8!
There is Experia Z2, S5, HTC alternatives. Apple just wants it their way, no wonder they are losing market share. If they raise the price, many will go away. iPhone is not the best.