It is all rage is to be talking about iPhone X and its state-of-the-art features, along with its highest price point for any iPhone ever. Buried amidst the hype, almost unseen, Apple has quite cleverly and silently, raised the pricing of their typical annual upgrade cycle.
Apple's flagship iPhones, such as the previous iPhone 6S, started at $649. A year later with the arrival of the iPhone 7, its price also stayed at $649, while the iPhone 6S starting price dropped by $100 to $549. The same Apple pricing methodology has applied for years – until Tuesday.
With the arrival of iPhone 8, Apple predictably lowered the iPhone 7 $100, to a new starting price of $549. However, instead of iPhone 8 starting at $649, Apple has raised iPhone 8's starting price to $699. The entire iPhone 8 lineup, including the iPhone 8 Plus is now $50 more than their predecessor, but there is a new equation in this mix, and that is of course is the all-new iPhone X.
Apple's stunning iPhone X is an all-new design with state-of-the-art features no other smartphone has – at any price. Apple's starting price point for iPhone X is $999, and it may explain the reason Apple raised the traditional $649 starting price point to $699 for iPhone 8, and $799 for iPhone 8 Plus.
It appears the price increase was, mostly, a marketing decision. It can be argued iPhone 8 versus iPhone 7 is one of the smallest incremental updates between iPhones since the 3G to 3GS. There are not many costly new features that justify the price increase, but moving the iPhone 8 pricing up a notch allows iPhone X's $999 to no longer be on an island and the entire iPhone pricing model simply makes more sense.
Based on today's iPhone 8 sales, it appears Apple will see little, if any, scrutiny for such a price increase. iPhone sticker price may scare some buyers away, but Apple understands that most people are now inoculated to retail pricing due to the fact that most customers are on monthly payment plans. A few dollars more a month is easy for consumers to justify. Roughly $2 more a month for 24 months for a new iPhone 8? That's a no-brainer for most consumers.
The pricing increase is also likely to aid iPhone X sales. Those owning an iPhone Plus model can be paying up to $40 a month for their iPhone. Apple has the iPhone X starting at $49.91 a month via their own upgrade program. $9 or $10 more a month for iPhone X? Many will take the leap. Carriers are sure to offer trade-in and incentive programs for current and new customers to upgrade to new iPhones. Again, consumers won't be thinking in terms of $999 nearly as much as they will be hunting for trade-in and upgrade deals to get into an iPhone 8 or iPhone X with a minimal monthly fee increase.
I've already asked the question of Apple, but as of this posting have not received an answer as to why the price increase for the iPhone 8 series. We aren't holding our breath we'll get an answer either, and if we do, we doubt it will be one that makes a solid financial case for the price increase, save for "because we think we can."
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