How Much SHOULD the iPhone X Cost?  

Market Strategies Releases Exclusive Price Point Analysis   

It’s September, which means the unofficial end of summer, football, a new school year…and a new iPhone release! But this year—the 10th anniversary of the iPhone—Apple is breaking the mold. Why?

  • As contracts have become virtually extinct, consumers are keeping their phones longer, creating a lengthier upgrade cycle. Apple needs to provide a more compelling reason to buy their product than simply, “it’s that time of year again.”
  • Apple has been criticized by some as losing its innovation edge by offering only minimal advancements. This new iPhone X model not only promises to create a new “premium” smartphone but also breaks up Apple’s typical two-year full upgrade cycle.

So, what is new and different about this phone that makes it so special?

iPhone X Expectations

A major upgrade including a chassis overhaul and new features, which allow people to interact with the phone in new ways. Of course, standard upgrade elements—faster processor, new operating system and better camera—will also be included.

New features:

  • Larger, curved edge-to-edge screen expected to rival the usable screen size of iPhone 7 Plus
  • Home button eliminated (which also helps screen size)
  • Flexible plastic OLED screen provides a thinner, lighter device with less power consumption and better resolution
  • Glass body—similar to iPhone 4 series—but with a stainless steel frame, similar to Apple Watch
  • Facial recognition and retinal scanning for added security
  • Wireless charging
  • Dual vertical cameras
  • Improved water resistance
  • Augmented reality

Apple received its share of negative press after the release of the iPhone 7 showed little change from previous models, leading many to wonder if Apple was at the beginning of a downward cycle—especially as the Samsung Galaxy series continued to gain ground. The hope for Apple will be that the significant changes to the iPhone X puts an end to the naysayers and results in Samsung being the one playing catch up.

However, such a major overhaul comes at a premium price to consumers. Rumors have the price tag ranging anywhere from $1,000–1,600, two to three times more than other iPhones on the market.

Apple is betting that consumers will be drawn to the shiny, new toy despite the hefty price. Will that gamble pay off?

Our exclusive technology trends research shows that Apple may be onto something—36% of current smartphone users express an interest in paying more to get their hands on the new iPhone X. Naturally though, this figure is highly influenced by how much more they would have to pay.

We tested four different price points, using a reverse auction approach.

At the lowest price point of $1,000, purchase likelihood is cut in half compared to when consumers only knew that it would be “more expensive.” Of course, once the product hits the market and is able to garner a strong positive buzz, these figures could change.

So, while interest remains, the higher cost may prove to be a deterrent for certain individuals. All consumers are not created equal—some are more willing to pay high prices while others would not be interested in upgrading to the iPhone X at any price. Understanding the differences among these consumer segments is critical to optimizing marketing messages, planning inventories and maximizing revenue opportunity associated with the iPhone X launch.

For example, groups that express greater interest include:

  • Current AT&T customers (perhaps still some carryover from its initial exclusivity)
  • iPhone loyalists
  • Individuals with higher income levels

Our pricing curve analysis reveals that the optimal price for Apple to charge is around $1,000—which maximizes revenue while minimizing the number of potential buyers who are turned off by the high price.

For more details, including a profile of potential iPhone X buyers and a more in-depth analysis of purchase likelihood, download our report.

Download the Report

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