UBS analysts predict that the next iPhone probably won’t cost the $1,000 price tag that some have predicted.
In a note to investors on Tuesday, the bank wrote that it expects the 10th anniversiary iPhone — which is being widely referred as the “iPhone 8” but could also be called the “iPhone 10” — to be priced between $850 to $900 for an entry level (64GB) model.
“Apple is about mainstream luxury, so a $1,000 phone seems less likely,” wrote UBS analysts Steven Milunovich and Benjamin Wilson on Tuesday.
“We expect Apple to price the anniversary iPhone with 64GB at $850-900, a slight premium to the Samsung Galaxy S8 Plus.”
The duo said Apple can’t try and sell its upcoming device for too much more than the $850 Samsung Galaxy S8 Plus due to the smaller screen.
“Samsung’s S8 Plus has a 6.2-inch screen, larger than the 5.8-inch screen expected on the OLED iPhone,” they wrote. “This limits Apple’s ability to price too high.”
Milunovich and Wilson expect that the next iPhone, which could come with a radical overhaul, will come with two storage options: 64GB and 256GB. They write that the 256GB model could cost $950 to $1,000, before pointing out that the 256GB iPhone 7 Plus already costs $970.
Apple’s products cost more in the UK and it’s possible that a $1,000 in the US would cost £1,000 in the UK, which equates to around $1,250.
The iPhone is due a major refresh and some are speculating that the next handset will boast incredibly powerful features around augmented reality that have never been seen in a smartphone before.
UBS Asia hardware analyst Arthur Hsieh estimates the factory cost of the phone could be $70-90 higher than the current Plus model. If true, Apple will clearly need to up its prices to ensure its margins remain healthy.