Well-known analyst Ming-Chi Kuo, formerly of KGI Securities, is out today with his first Apple-related investor note at his new firm, TF International Securities. After offering up a slew of 2018 iPhone details over the last few months, Kuo this time is breaking down Apple’s price strategy for the upcoming smartphones…
In today’s investor note, Kuo says that he expects. Apple will “adopt a more aggressive price policy” for this year’s iPhones. Kuo points to a few reasons as to why this is the case.
First, he acknowledges the “concern over the negative impact of a higher price” in a smartphone market that is mature and nearing saturation. Furthermore, Kuo says Apple will have an improved cost structure this year because of improvements in production yield and cost reductions of components.
Finally, Kuo credits that Apple will want to increase the number of Face ID users and overall device users as to “benefit the promotion of the Apple service and ecosystem.”
As for specific pricing, Kuo states that the 6.5-inch OLED iPhone X Plus will be priced between $900 and $1,000 – the latter of which is notably the entry-level price for the current iPhone X. As for the 5.8-inch OLED iPhone, Kuo predicts an $800 to $900 price point, which is a notable drop compared to current pricing.
Finally, Kuo reiterates his belief that the LCD iPhone model will come in between $600 and $700. This device is predicted to use an LCD panel instead of OLED and feature the same iPhone X-like design.
Last but not least, Kuo says that Apple will announce all three new iPhones at an event in September, and release them to consumers that same month. A previous report had indicated the device could be delayed until November, but Kuo refutes that detail.
We expect the shipping times of components/EMS assembly for the 5.8” OLED, 6.5” OLED, and 6.1” LCD start from early June/early August, late June/lateAugust, and July/September, respectively. We believe Apple will announce 3 new models at the same time in September and 3 new models will be available in September. We therefore expect that iPhone shipments will grow significantly starting in 3Q18 and that the momentum will last until 2Q19.
Ming-Chi Kuo departed KGI Securities back in April, and while some thought he might move away from covering Apple, that doesn’t appear to be the case.
What do you think of Kuo’s pricing expectations for the 2018 iPhones? Let us know down in the comments!
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