iPhone 6 starting at $299

[thekev]

Yeah, I know the high prices are due to Apple. However, without subsidies, I doubt smartphone adoption in the US would have gone as quickly. Smartphone sales, the iPhone in particular, wouldn't be as high either. AT&T cutting subsidies has a strong potential to lower iPhone sales in the US either due to users buying less expensive phones or taking a longer time between upgrades. The iPhone has unusually high market penetration in the US because of subsidies. Without it, Apple might have to cut prices in order to maintain sales.

That is somewhat true. Your comments remind me why I found some of the comments regarding the 5C (as a cheaper iphone) laughable. It was the same $100 off with mostly prior year hardware and a cheaper case design with poor color choices. I will say that Apple has stuck to similar price points in countries where subsidies are less common. They may have stuck to a similar price model although it's difficult to tell. There hasn't been a single point in the US where they relied solely on the unsubsidized retail cost of the phone for the bulk of their sales, so it's difficult to say whether it would change their pricing strategy. I am confident it would at least come up in board meetings.

 

[tech4all]

I hope it's as expensive as possible at launch to make us early adopters more special and stand out from the masses who won't be able to afford it. I'd be happy to pay $1500 if it meant very few people were parading around the same device as me. It's annoying.

You are special!

 

[Apple_Robert]

I don't believe we will see the price at $299. If that were to happen, I think there will be a lot less people upgrading, unless there is some kind of spectacular ability with the new phone.

 

[thekev]

It all depends if verizon and ATT collude to both have the $299 base price subsidized.

Don't you think it's collusion all the carriers have the base iPhone at $199 subsidized for the past 3 years since ATT lost it's exclusive contract?

Why do all the carriers set the $199 price for 2 year contract?

Manufacturers frequently have have suggested retail pricing. Even if they don't items with tight markups often end up at the same initial price points. Beyond that even if they were price matching their competition, collusion that competitors have explicitly agreed upon a given price. You may want to do more reading before making such bold assertions.

 

[rui no onna]

There hasn't been a single point in the US where they relied solely on the unsubsidized retail cost of the phone for the bulk of their sales, so it's difficult to say whether it would change their pricing strategy. I am confident it would at least come up in board meetings.

Sure there was. Back in 2007 the iPhone was released at $499 for 4GB and $599 for 8GB. A couple of months later, they dropped the 8GB to $399, put the 4GB on clearance for $299 (cheapest MSRP ever for an iPhone) and introduced a 16GB model for $499. However, back then the iPhone was just a minor chunk of Apple's pie. Nowadays, the iPhone is their primary cash cow. It will be curious to see what effect AT&T's strong push for Next will have on Apple's bottom line. In the US, I believe majority of iPhones sold are for AT&T so I doubt Apple can just ignore what AT&T is doing.

The iPad Air starts at $499. Why? Because that's the price the market will bear. Isn't it curious then that the MSRP for the iPhone 5s is $650 when its manufacturing costs is significantly lower than the iPad's? Wonder if they can maintain their current pricing when subsidies are taken out of the equation.

 

[mantan]

Manufacturers frequently have have suggested retail pricing. Even if they don't items with tight markups often end up at the same initial price points. Beyond that even if they were price matching their competition, collusion that competitors have explicitly agreed upon a given price. You may want to do more reading before making such bold assertions.

I always thought it was a Minimum Advertised Pricing...which ensures the price is same virtually everywhere. (This is very common in the golf industry with companies setting MAP's so that new equipment prices are identical everywhere).

This is different than collusion since the manufacturer puts the limits on the retailer, as opposed to the retailers colluding to set the price.

 

[rui no onna]

I always thought it was a Minimum Advertised Pricing...which ensures the price is same virtually everywhere. (This is very common in the golf industry with companies setting MAP's so that new equipment prices are identical everywhere).

This is different than collusion since the manufacturer puts the limits on the retailer, as opposed to the retailers colluding to set the price.

Pretty sure this is the case. Apple maintains relatively tight control on the iPhone's distribution.

 

[easy-peasy]

Pacific Crest analyst Andy Hargreaves says that he believes that the starting price will be $299.

What do you guys think?

$299 w/ contract as the entry level price? I personally don't think there is any chance of this happening (Apple would also lose me as a customer).

What I might like to see though is a base level iPhone 6 for $199 like usual as well as a 'premium version' for $299 w/ contract that has things like - bigger display made of super scratch resistant sapphire, 2GB of RAM, and a 3000mah battery (albeit slightly thicker).

One can dream right?

 

[ionjohn]

$299 w/ contract as the entry level price? I personally don't think there is any chance of this happening (Apple would also lose me as a customer).

What I might like to see though is a base level iPhone 6 for $199 like usual as well as a 'premium version' for $299 w/ contract that has things like - bigger display made of super scratch resistant sapphire, 2GB of RAM, and a 3000mah battery (albeit slightly thicker).

One can dream right?

Yup you're dreaming and like most, if not every dream, it ain't gonna happen lol

 

[thekev]

Sure there was. Back in 2007 the iPhone was released at $499 for 4GB and $599 for 8GB. A couple of months later, they dropped the 8GB to $399, put the 4GB on clearance for $299 (cheapest MSRP ever for an iPhone) and introduced a 16GB model for $499. However, back then the iPhone was just a minor chunk of Apple's pie. Nowadays, the iPhone is their primary cash cow. It will be curious to see what effect AT&T's strong push for Next will have on Apple's bottom line. In the US, I believe majority of iPhones sold are for AT&T so I doubt Apple can just ignore what AT&T is doing.

The iPad Air starts at $499. Why? Because that's the price the market will bear. Isn't it curious then that the MSRP for the iPhone 5s is $650 when its manufacturing costs is significantly lower than the iPad's? Wonder if they can maintain their current pricing when subsidies are taken out of the equation.

I remember that, although it doesn't account for whatever AT&T was paying them. As you know you paid the same amount for AT&T service as you would have with a contract plan. Apple's base is quite a bit broader at this point. As for the iPad, I haven't directly compared the theoretical cost breakdowns between the two devices.

I always thought it was a Minimum Advertised Pricing...which ensures the price is same virtually everywhere. (This is very common in the golf industry with companies setting MAP's so that new equipment prices are identical everywhere).

This is different than collusion since the manufacturer puts the limits on the retailer, as opposed to the retailers colluding to set the price.

Ah yeah I've seen that too. I don't think Apple uses that, because walmart and others often openly advertise reduced prices on iphones. It isn't a "click to see lower price in cart", which is what you'll see under those circumstances. As you mention collusion would be if retailers came to an explicit agreement on a set price.

 

[Imory]

I hope it's as expensive as possible at launch to make us early adopters more special and stand out from the masses who won't be able to afford it. I'd be happy to pay $1500 if it meant very few people were parading around the same device as me. It's annoying.

Oh my god. *facepalm*

 

[jca24]

I think most of you are missing the point of doing away with subsidies. With ATT people have been getting phones by signing a 2 year contract, paid $199 up front for a 16gb iPhone and paid the balance that was built into their plan. Now we are seeing the mobile share planes where you can bring your own phone or use next, which has a term to pay off the phone, either for 1 year and you trade the phone back in to them or 2 years and you keep it. This is "financing" the phone in a way. I think they will take it further where ATT will have this arrangment:
1- pick the plan you want (amount of data, talk and text built in)
2- pick how many devises you want tied to the plan, $15 for an iPhone etc
3- pick your phone
a- bring your own
b- buy a new phone from Apple or ATT (full price)
c- finance a phone from ATT, making payments for 1,2 or 3 years.
*if you finance the phone you are tied to ATT for the term
*if you BYOP you are not tied to ATT, just like off contract is now.

This will still allow people to get new phones without paying a lot upfront. With subsidies the wireless companies bought phones from Apple, samsung whoever in bulk. They will continue to do this to have inventory on hand just like before. People will find a way to get an iPhone. The way they get them will change. Do the math on financing a $700 iPhone for example for 1yr, 2yr or even 3yr. Add the amount to the plan amount, it's not much different. Also, there will be an interest rate or some kind of finance charge.

 

[ionjohn]

Image

Haha you can still hope though, who knows what might happen!

 

[Tamara91]

hard to believe

 

[CPx]

Is it just me who thinks this is sarcasm?

I give it 50/50.

 

[cmChimera]

http://news.yahoo.com/iphone-6-cost...lYwNzcgRwb3MDNQRjb2xvA2JmMQR2dGlkA1ZJUDQwMl8x

Pacific Crest analyst Andy Hargreaves says that he believes that the starting price will be $299.

What do you guys think? To keep their margins up I think this may be true.

I agree with him on the size thing. I think Apple will only release one size for the next iPhone. But I highly doubt they would not have the starting price be $199.

 

[IpadSC400]

Pacific Crest analyst Andy Hargreaves is a MORON. No iPhone goes for that little even when bent, bitten, and dropped.

 

[Eddie Bombay]

It's going to be 199, 299 & 399.

 

[john123]

0% chance of that happening. Apple won't let their sales flounder by raising the subsidized price of their phone above everyone else.

This. The OP mentions margins, but the more important driver is net profit total, versus the profit percentage. The corresponding hit in volume (from lower demand) would be too problematic.

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Pacific Crest analyst Andy Hargreaves is a MORON. No iPhone goes for that little even when bent, bitten, and dropped.

Uh, they were talking about subsidized...

 

[screamingapple]

As a EXTREME iPhone lover, I have to say, if iPhone 6 doesn't deliver a 5+ screen, hello Sony Xperia.

 

[aneftp]

Americans are used to buying things at a certain price point. Remember pre subsidized iphone 3G. Most smartphones sold on contract (Palm treo, blackberry and various windows mobile phones) were well in excess of $300.

$199 is a magic starting 2 year contract price point. Heck Americans are still buying 2 year old tech in the iPhone 4S because it's "free" on contract.

Verizon for the past couple of years have tried to sell their high end android devices at the $299 price point on 2 year contract. Besides the Note 2 and 3. Most of those $299 starting price points were low volume sellers

I believe Apple still controls what the carriers can sell the iPhones for on contract. And it's still going to be $199 for the base iPhone. People are free to buy iPhones for full price. That won't ever change.

Now if Apple releases two different sizes of iPhones that carry the same next generation tech than we may be having a different discussion.

 

[stuffradio]

As a EXTREME iPhone lover, I have to say, if iPhone 6 doesn't deliver a 5+ screen, hello Sony Xperia.

What do you love about the Xperia? I will be on the same phone for 4 years this September which is when I'm upgrading. I'm pretty sure I will upgrade to the latest iPhone, but I'm also looking at other phones just in case. I love my iPhone though.

 

[Septembersrain]

I've never been on a subsidiary based post-paid plan. I've always dished out $100's of dollars to keep my plans low. I'm probably the new target audience.

 

[AppleWarMachine]

sure that's fine as long as it comes with 32GB

 

[luckydcxx]

As a EXTREME iPhone lover, I have to say, if iPhone 6 doesn't deliver a 5+ screen, hello Sony Xperia.

seems like a lot of rumors are pointing towards a 4.7" screen. Would you really give up the Apple ecosystem over .3"?