Unlikely scenario: Analyst Peter Misek says Apple wants to raise iPhone 6 prices by as much as $100


Analyst Peter Misek, via StreetInsider, is saying that Apple is looking to raise iPhone 6 prices by as much as $100. Misek claims that Apple has been actively negotiating the increase with carrier partners.

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Misek says that Apple can leverage the iPhone 6’s market power to force carrier’s hands. He says that carriers believe the iPhone 6 will be the only headline-worthy phone this year and that carriers need the iPhone to retain subscribers.

But we think this general lack of differentiation could be the reason why Apple may be able to get a price increase. Carriers realize that the iPhone 6 will likely be the only headline-worthy high-end phone launched this year and that they will lose subs if they do not offer it.”

Misek says that a $50 increase in average selling prices for the next-generation iPhone could increase Apple’s EPS by 11%.

An ASP increase could offset iPhone 6 gross margin headwind, according to Misek. “Our prelim iPhone 6 BOM est indicates GM could be up to 450bp lower than the 5s (pricier display/AP partially offset by general 5%-10% price concessions),” he notes. “Our current estimates assume a 430bp decline, which we feel is conservative unless some of the components run into yield issues. We estimate a $50 ASP increase on the iPhone 6 would raise GM by 375bp and $100 by 700bp so a $50 ASP increase would offset most of the iPhone 6 COGS pressure.”

Misek said a $50 iPhone 6 ASP increase would raise revenues EPS by 2%/11% and a $100 increase by 6%/24%.

Whilst it is true that the iPhone has staggering market power, it is hard to believe that Apple will up prices away from the norms they have established over the past seven years. In fact, the trend recently has been that Apple needs to lower prices for iPhones, not raise them, as demonstrated by Apple’s introduction of the iPhone 5c last year.

As StreetInsider notes, raising prices will likely hurt sales of unlocked iPhones — a purchase method that is steadily increasing in popularity.

Misek’s track record with Apple predictions is also not great by any measure. The analyst has claimed multiple times that the iTV is on the horizon. More recently, he said that the iPhone 5s will come in eight different colours, feature NFC and launch in June.

With the possible introduction of two iPhone 6 models (both 4.7inch and a 5.5inch variants) it is possible that the larger iPhone may come with a higher price point to match. However, at this point it is really hard to believe that Apple will budge from the base $99/$199 price points it has instated for the last several years.

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  1. shareef777 - 9 years ago

    Unless it’s something revolutionary (I’m talking about all new hardware with a completely redone iOS), then it’s not happening. They know that if all they do is increase the screen size, make it a bit faster, and jack up the price by $100 then tons of people are hopping off the train.

    • Paul Frechette - 9 years ago

      Well considering Samsung took their “S” series phones and made them with a larger screen and started calling them the “Note” while jacking up the price $100 and tons of people flocked to them I’d have to disagree with you.

      • Dimitri Kyriakis - 9 years ago

        The Galaxy Note Series is NOT a 4’7 each screen. Do not know where you are getting your info from but here is the real info.

        Note 1 – 5.3 inches with Li-Ion 2500 mAh battery
        Note 2 – 5.5 inches with Li-Ion 3100 mAh battery
        Note 3 – 5.7 inches with Li-Ion 3200 mAh battery

        So that is way bigger then the iPhone 6 4’7 inch screen. Nothing compared to the Note serious. Also the Note Series features more then the iPhone offered with NFC / S Pen stylus / 3 GB RAM & 4K Recording ( Both on Note 3), LTE Cat 4 ( Note 3 again), Infrared port aka IR Blaster ( Again Note 3).

        The Note 3 Series has more power, Screen size, Bigger battery & features more things then a simple iPhone does.

        All this comes from a iPhone Fan boy as well. That is pretty sad.

  2. rettun1 - 9 years ago

    For the 5.5 inch model, I’d expect as much.

  3. PMZanetti - 9 years ago

    Unlikely? No.

    If what we’ve been hearing is accurate than this is exactly what is coming…

    4.7″ starts at $199

    5.5″ starts at $299

    When did anyone doubt any of that?

    • Pierre Dybman - 9 years ago

      The problem again is with the many places where unlocked is the rule. With 16GB 5S costing € 699 VAT included already, adding another € 100 to the entry price will just not cut it in Europe. Also, the 5S will need to fall by more than € 100 to make a better price scale.
      Ideally, i would see € 399 for the 5C if it remains, € 499 for the 5S, then € 599 for the 6 in 4.7″, and finally € 699 for the 5.5. But i fear that i’m in general € 100 under the real prices :-(

  4. Honestly a larger iPhone is an exciting opportunity for Apple to establish some new norms in device pricing. The idea that people will abandon the platform if Apple charges a higher premium on best in class devices is ridiculous. The lock in has already been secured with hundreds of millions of consumers, and many more people are waiting to hop on board and adopt iOS when they get the chance to buy a bigger screen device. Price is irrelevant. It’s all about elegance and experience.

    • roberthildenbrand - 9 years ago

      Said like one who lives in the lap of luxury. If people haven’t noticed, the economy hasn’t improved, or by much and for anyone under the age of 30, and without a meaningful career… Such devices shouldn’t even be affordable as they are priced now. Where do you people get your money from? I mean really?

  5. roberthildenbrand - 9 years ago

    At that price, they can keep it. The Graphic interface makes me want to say unkind things, their inability to understand that the only way they can innovate their product any further is to empower the users to make changes, not they make the over priced changes for us.

    I am still using my Iphone 3gs. Why? Because it works. It isn’t fast, but its graphical interface is much better, and I hate endless menus. I love textures. Give me something I want, then maybe I will fork over my hard earned cash for a device that doesn’t make me money or entertain me half as much as my gaming laptop does. (not apple by the way and not windows 8.)

  6. Troy (@Bulldogger123) - 9 years ago

    Why is anyone taking this guys word with a grain of salt?

  7. Tim Jr. - 9 years ago

    More likely, if anything, is if they come out with 2 iPhones.. 4.7 and 5.5, they will start the 5.5″ at $100 over the 4.7″..

    That makes sense.. what this guy is saying .. makes no sense and might as well as be an adult in the the peanuts cartoon, “Waa wa wa wa, wa wa wa wa, wa..” blah blah..

  8. scumbolt2014 - 9 years ago

    Makes sense that the largest capacity iPhone could be more. Going to an iPhab will increase the size so maybe a 128gb version will finally be available.

  9. scumbolt2014 - 9 years ago

    And if the next iPhone is more expensive I’ll blame the analysts and Wall Street for badgering Apple and pissing them off about making a cheap phone.


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Benjamin develops iOS apps professionally and covers Apple news and rumors for 9to5Mac. Listen to Benjamin, every week, on the Happy Hour podcast. Check out his personal blog. Message Benjamin over email or Twitter.