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Report: Apple May Charge $100 More for the Next iPhone

Jason O. Gilbert
Technology Editor
Yahoo Tech
April 14, 2014

Report: Apple May Charge $100 More for the Next iPhone

Jason O. Gilbert
Technology Editor
Yahoo Tech
April 14, 2014

Ciccarese Design imagines the iPhone 6 with larger screens. 

Call it the iPhone $ix. 

According to a new report from Jefferies analyst Peter Misek, Apple is negotiating with carriers to charge $100 more for its next iPhone. The report was first unearthed by Business Insider. Here’s the money quote from Misek’s report, via BI:

“Our checks indicate Apple has started negotiating with carriers on a $100 iPhone 6 price increase. The initial response has been no, but there seems to be an admission that there is no other game-changing device this year.” 

A new iPhone 5s with 16 GB of memory costs $199 with a new two-year contract on AT&T and Verizon, the two largest American mobile carriers. There is precedent for a $299 phone: Samsung’s Galaxy Note 3 — the “phablet” smartphone with the huge screen — retailed for $299 with a two-year contract when it debuted last year.

(In the United States, the price of your smartphone is subsidized when you sign a new contract. The actual device costs hundreds of dollars more, which you pay for over the life of that contract. In most other countries, you pay the full price of the phone, and then pay for service as you go.)

So, would Apple really hike prices on its most popular product, after customers have gotten so used to the $199 iPhone? It might make economic sense. Certainly, there is sufficient demand for a new iPhone, as evidenced by the long lines and supply shortages that arise every time a new model is released. And, too, the iPhone has no real existential threats from other manufacturers, as Misek notes: Though Samsung’s phones are popular, they are nowhere near popular enough to dethrone the iPhone. New phones from Samsung, HTC, and Nokia this year are probably not radical enough to take momentum away from the record-crushing Apple. 

A $100 price hike would likely do little to stop most iPhone shoppers from selecting a different phone. They want their iPhones, and they want nothing else, an extra Benjamin be darned. 

On the other hand: This price hike is far from a done deal. We haven’t heard this rumor anywhere else. That’s especially troublesome since the analyst responsible for the rumor, Peter Misek, does not have a perfect track record when it comes to Apple rumors: In 2012, for example, he predicted five separate times that Apple would release its own television set by year’s end. That, uh, didn’t happen.

And, too, even Misek admits this might not come to fruition, noting in his report that Apple is receiving healthy pushback from the carriers. (Hooray, carriers!)

Finally, an internal document that surfaced as part of the ongoing Apple-Samsung trial shows that Apple knows its customers want cheaper, larger smartphones, which is what various Android models can offer. Fittingly, Apple’s next iPhone is expected by most analysts to feature a larger screen. So would it make sense for Apple to make that phone more expensive, not less?

(Re/code) 

For now, you probably don’t have to worry about an iPhone price hike. If more rumors, from additional sources, to that effect begin to appear, then you should start cutting back on the fancy dinners and expensive toilet paper to save some dough. Until then, let’s treat this as an unlikely scenario for this fall’s next iPhone.