Now that Samsung has revealed their next big thing, the next iPhone is squarely in the spotlight. Previous rumors about the cost of the next iPhone were that it would be over the $1,000USD mark. That is at least one of the three models that is rumored to be coming. For now, the speculated trio of iPhones is supposed to consist of the iPhone 8, 8+ and iPhone X with the latter being the most expensive. Now analysts at UBS are speculating that the next iPhone should not be that costly but should be competitive with Samsung’s Galaxy S8 lineup.
UBS said the factory cost of the 64GB OLED iPhone will be $70 to $90 higher than the iPhone 7 Plus model with a sale price of between $850 and $900. The higher cost could weigh on Apple’s gross margin which UBS said is likely to decline to 38.5 percent in the fiscal 2018 year, from its estimate of 38.7 percent for the current fiscal year. But the 64GB OLED model priced at $870 would be good for earnings. “We think an $870 price would be accretive to EPS but dilutive to gross margin, a dynamic Apple has said it would accept,” UBS noted.
UBS believes that Apple wants to be competitive with Samsung and thus will not be pricing the next iPhone too far off of Samsung’s asking prices.
“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.
We already know that Apple has ordered millions of OLED displays from Samsung to make the OLED iPhone so it makes sense they want to stay in the same price range as the S8. If this speculation holds true, it’s a good sign for customers who may be interested in the OLED version of the phone. It’s expected that the OLED version will see a supply shortage as users clamor to order and secure one.
Last Updated on April 4, 2017.