It has been widely reported that the upcoming iPhone 8 will cost consumers over $1000 at retail because of new features such as the OLED display and new 3D sensors. A new investor note from UBS analyst Steven Milunovich, however, disputes earlier reports and says the iPhone 8 will come in for less than $1000.
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According to Milunovich (via CNBC), the iPhone 8 will still come at a premium compared to the current iPhone lineup, but not as much of a premium as once thought. He claims that the factory cost of the 64GB iPhone 8 will be $70 to $90 higher than the equivalent iPhone 7s Plus model (presumably the 32GB variant). Thus, Milunovich claims the device will come with a sticker price between $850 and $900 for consumers.
Currently, the 32GB iPhone 7 Plus comes in at $769 at full retail price, so a base price of $850 or even $900 is not that significant of a change for consumers. Furthermore, the price hike would further increase the average selling price of the iPhone, something that will surely please investors.
Milunovich expects the radically different iPhone 8 to see a “bulge of buying.” He specifically believes that the OLED iPhone 8 will account for 45 percent of shipments during fiscal 2018.
“Apple customers seem fine with paying more for products they feel are differentiated,” Milunovich noted, adding that the OLED model could account for 45 percent of shipments in fiscal 2018.
“Apple’s top model will be at a display size disadvantage to Samsung’s Galaxy S8 Plus. We still think Apple will choose to price its top model relative to Samsung’s top model, but remain cautious on how much higher Apple could ultimately go on price given a smaller display,” Milunovich wrote.
“Offsetting this display size differential is the fact that the OLED iPhone could have features not included in the Galaxy S8 Plus, such as a front facing 3D sensing camera, embedded fingerprint sensor and higher quality facial recognition.”
The iPhone 8 is expected to be unveiled later this year. Keep up with everything we’re expecting the device to feature here.
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