High Price of iPhone 8 Is Due to Newer Components and Technology, Not Necessarily Higher Margins, Claim Analysts

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Sep 6, 2017
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An edge-to-edge glass, OLED panel, facial recognition, and 10nm FinFET SoC all fit in the very expensive iPhone 8. According to analysts, Apple is not looking to increase its profit margins with the imminent launch of the iPhone 8 and is definitely not looking to piggy back on the bezel-less smartphone’s pre-launch popularity thanks to all the hype created since last year. Instead, the rumored high price tag is thanks to all the additions in the handset that have not been seen before in any iPhone iteration to date.

UBS Estimates That the Total Components Price Increase Mounts to $80 – To Maintain Similar Profit Margins, Apple Will Have to Keep the Price of the iPhone 8 at $900 and Above

Earlier, UBS analysts stated that it would not make sense for Apple to price the iPhone 8 at a whopping $1,200 since it would fall out of competition with the likes of the Galaxy Note 8. Instead, these analysts believe that the phone’s base model will come with a $900 price tag and will be available in two storage models.

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This $900 price tag will be the result of expensive components present in the phone and not because Apple wants to take its margins to a whole new level, according to UBS. The analysts have marked the components’ pricing below:

  • OLED screen: $24 more costly
  • Dual lens camera: $19 more costly
  • 3D sensing technology: $10.50 more costly
  • Others: $26.50

This will result in a components’ price increase of $80, meaning that in order for Apple to maintain similar margins of the iPhone 7 and iPhone 7 Plus, it will have to price the iPhone 8 at $900. This might be a bit hard to fathom for consumers, but the premium price will help them gain access to a lot of exclusive features, and optic upgrades.

Plus the $900 price tag is in line with the price of the Galaxy Note 8, so the two will be competing with one another in a variety of different categories.

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Will you buy the iPhone 8 for a $900 starting price? Tell us your thoughts down in the comments.

Source: Business Insider

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