Just yesterday we have suspected the there is a high chance to see a price bump for the upcoming iPhone 8 and today Fast Company already reports that the price might be close to $1000 and even higher. This doesn't take us by surprise at all as Apple took this rout already with the 2016 MacBook Pro.
Fast Company states:
A special 10th-anniversary edition of the iPhone is expected to be the ultimate iPhone, and it’ll come with a price tag to match—very likely north of $1,000, says a source with knowledge of Apple’s plans.
We do think that customers will embrace this price tag and before laughing like Steve Ballmer after the initial iPhone release at it's price point, read on to see why we think so. Remember that Ballmer stated at that time that no one will pay that amount of money for a phone. He was wrong.
Apple's Reported iPhone 7 Profits
Apple reported record profits for iPhone 7 but not record number of devices sold and the reason for this is explained by Apple. Customers opted to purchase higher capacity iPhones which have a higher profit margin and also the iPhone 7 Plus was reported as a big hit. The iPhone 7 Plus with 256 GB of storage costs already close to $1000 yet still customers purchase this device.
On the other hand, there is the regular iPhone 7 and iPhone SE and those devices have the same price as their predecessors and this is offering a comfort to a potential buyer. When it comes to purchasing though, many would say "what the hack, I'll put the version with the 128 GB or 256 GB in the basket" but it's important for the customer to know that they can opt for the regular price as well. Psychologically this works out very well and this is what Apple's figures showed us.
If this was planned out, it is a very good plan, and if it wasn't, it is a fortunate coincidence for Apple.
2016 MacBook Pro Pricing Model
Apple also reported record profits for the MacBook Pro as well for the same reason. There is a comfort knowing that you can purchase the version with no Touch Bar for the same price as the previous model, but hey, why not spend the extra money for the new feature I might need or not?
This looks like a pattern and it can be expected for the iPhone 8 strategy as well. Put yourself in the shoes of Apple. Wouldn't you sell a phone for $1000 knowing that there is willingness from your customer?
iPhone 8 Features
Notice there hasn't been a mention related to the iPhone 8 pricing model and it's expected features, even though this was speculated on many other sites. The reason is simple. Customers are expecting new features with every release for the same price. This is what we are use to since 2007 and this cannot change with the anniversary model as it will attract a lot of criticism.
But, to have a standard version for the old price that nobody will buy and a packed version with a totally different price will make sense to everyone.
In conclusion. Tim Cook knows how to make money.