Why Does The Price of iPhone X Start From $999, And That May Be A Bad Idea!

The cat is out of the bag, and the surprise element of Apple’s yesterday event was the price of iPhone X.

Apple Inc. (NASDAQ:AAPL) has been dominating the news in tech circles for a few months now for a variety of reasons, mainly for just launched iPhone 8, iPhone 8 Plus and iPhone X. It may be too early to say but from the initial response, it’s safe to say that the successor of iPhone 7 failed to impress users too much. The surprise element, however, of this year event got many heads turned. Yes, I am talking about iPhone X and the price of iPhone X.

I am sure being an avid consumer of Dazeinfo intelligence you are already aware of this fact that it’s called iPhone ‘ten‘, and not iPhone ‘ex‘.

The price of iPhone X starts from $999. Apple has decided to launch it only two variants of iPhone X – 64GB and 256GB. The iPhone X is loaded with tons of features that clearly distinguish it from the previous versions of iPhones. FaceID, Bionic Chip and Augment Reality are some of the new addition to the iPhone X. A big 5.5-inch OLED display is also important upgraded as users were waiting for the OLED display for long.

But this triggers a major debate on the price of iPhone X – Does the improved and new iPhone X justifies its launch price? Certainly, Not!

Apple recently became the first US company to have a $800 billion market cap amid much fanfare. Despite this monumental achievement, the focus remained squarely on the tenth anniversary iPhone – now known as iPhone X. Perhaps, the most hyped smartphone ever, the fever pitch surrounding the “iPhone X” is intensifying every day. Much before then the launch of iPhone X we reported how the new iPhone could be the most expensive iPhone price tagged at $1000. After the official launch of iPhone X it’s confirmed what many of us have suspected for a while now.

iPhone X: The Most Expensive iPhone Ever

Yesterday, Apple officially unveiled the price of iPhone 8, iPhone 8 Plus along with the price of iPhone X:-

• The iPhone 8 starts from $699, whereas
• The iPhone 8 Plus starts from $799.
• The iPhone X starts from $999.

We earlier reported iPhone X will have two models – 128 GB and 256 GB. However, it seems Apple has a bit different plans to make iPhone X more ‘affordable‘. The 64 GB model of iPhone X is priced at $999, whereas the 256 GB model sets buyers back a massive $1,149.

So why is the new iPhone X is so much more expensive than all the iPhones, including iPhone 8 and iPhone 8 Plus, Apple has launched till date? Let’s have a look.

Justifying The Price Tag

A lot of the reasons behind the iPhone X’s inflated price-tag has to do with the sheer amount of innovation Apple is cramming into the device. Analysts at Goldman Sachs expected new features such as a 5.8 inch OLED bezel-less display, 3D sensing, Faster memory, Biometric authentication, the new A11 processor and more.

This is how the new and upgraded features of the iPhone X affects pricing, according to analysts from UBS:-

• The upgraded camera is estimated to cost Apple $39 per unit, up from $36 in the iPhone 7 Plus.
• The faster memory is estimated to cost $35 up from $25 for the iPhone 7 Plus.
• The new Bezel-less OLED display significantly adds to the price, costing Apple $85 up from $60.
• The upgraded main board is estimated to cost Apple $13 per unit, up from $7. The upgraded casing is also drive price up by $10.
• The new 3D Touch or Force Touch module drives up prices by $7 per unit for Apple.
• Lastly, the all new 3D Sensing biometric authentication module is also estimated to cost Apple $10 per unit.
• Another factor driving up price is likely the absence of 32 GB model. This, however, makes sense from Apple’s perspective as the iPhone X is marketed as a premium device with a premium price-tag.

Will Users Ever Buy a $999 Smartphone?

For all its innovation and new features, the question remains as to whether users will be willing to part with $999+ for a smartphone. Analysts at Credit Suisse seem to think so. They have awarded outperform rating to Apple stock because of growing optimism and hype around the upcoming iPhone X “super cycle“.

Not everyone, however, is so convinced about this. Shira Ovide of Bloomberg Gladfy believes that Apple may not be able to do a repeat of the iPhone 6 super cycle as the US market and buying habits have changed. The extinction of carrier smartphone subsidies will likely make the $999 price tag too much to swallow. Since the US is such a key market for Apple, sales there will likely dictate the overall success of the iPhone X.

The iPhone X will also be facing tough competition from the likes of a rejuvenated Samsung and Google. The standard has already been set with the critically acclaimed Samsung Galaxy S8 and Galaxy Note 8. Additionally, the widely anticipated Google Pixel 2 is also likely to come out by the end of the year – the time when iPhone X will be available to buy.

With the Galaxy S8 and Galaxy Note 8 priced quite a bit cheaper than the iPhone X, Apple might find it difficult to convince consumers. The price-tag of $999 may also recuse Apple of the highly competitive and lucrative premium market in China which typically lies in the $400-500 range. This would be a pretty bad situation for Apple, as they are already losing valuable ground in the Chinese market.

Apple, however, may look to offset the price a bit with included accessories. Some earlier reports suggested that Apple may bundle in the AirPods with the iPhone X. However, Apple believes $999 price of iPhone X without any offer is attractive enough to hook buyers worldwide. While the selling a smartphone for $999 may seem like a bad idea to many, if there is one company which can get away with it, it is Apple.

Takeaways

• The iPhone X is the most expensive iPhone ever with a price tagged almost $1000. Marketed as a premium device, the phone will feature the latest and greatest that Apple has to offer.
• A slew of innovative new features is likely driving up the cost of the iPhone X. The biggest factor driving up cost is the all new edge-to-edge OLED panel.
• The much hyped iPhone “supercycle” may not take place due to lack of carrier subsidies in the US. This would be highly damaging to Apple who has been suffering faltering iPhone 7 shipments. Their recently achieved $800 billion valuations will also come crashing down if the super cycle does not occur.
• Apple faces tough competition from the Galaxy S8, Note 8 and upcoming Google Pixel 2. The more competitive pricing of these models may lead to customers opting for them in lieu of the iPhone X.