A Bigger iPhone 6 Could Carry a Bigger Price Tag, Too

Published on November 20, 2013
by John Paczkowski

Apple crystal ballIt has been just two months since Appleā€™s latest iPhones went on sale, but already analysts are wondering about the next — and more specifically, its price.

Given the high cost of components in Apple’s new iPhone 5s and the company’s appetite for high profit margins, some observers theorize that it may opt to ship its next flagship iPhone with a higher price. Susquehanna analyst Chris Caso is one of them, and he figures the so-called iPhone 6’s bill of materials — which is expected to include a faster chip and a new, larger display that may or may not be made from sapphire — will drive up the device’s retail price.

How much? At least $50 — maybe more, according to Caso.

“We think Apple could get away with a $50 to $100 premium for a larger screen size iPhone 6,” Caso wrote. “We think such a move could avoid the margin erosion that occurred when the iPhone 5 was launched.”

That means instead of $199 (with two-year contract), the iPhone 6 — or whatever the successor to the 5s is called — could price out at somewhere between $249 and $299.

That would, of course, be a break with Apple’s tradition of giving the next-generation iOS devices the same price as their predecessor. But that’s a tradition Apple has little trouble breaking when it sees a need to. Last month, it debuted the iPad mini with Retina display at $399, $60$70 more than the $329 of the original mini. It would likely have no trouble doing the same for the iPhone, particularly if the device’s new bill of materials required a higher price to maintain the fat margins of which Apple is so fond.

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