Apple To Launch iPhone Price Tagged With $550: Quite Unlikely

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After rampant rumours and speculations about Apple’s upcoming iPhones this year, it appears that the Cupertino giant won’t fail to nudge analysts’ and consumers’ anticipation. Rumour mills claim that Apple Inc. (NASDAQ:AAPL) has, yet again, revisited its pricing strategy of the 6.1″ LCD model and can make it cheaper enough. Getting almost iPhone X features without paying iPhone X price sounds like a surreal dream.

Apple’s upcoming lower-cost 6.1″ LCD iPhone could cost as low as $550 (the price of iPhone 7) and it could be available in two models, one that includes a single-SIM (like any other iPhone) and a second that features dual-SIM dual standby functionality, according to an investor’s note issued yesterday by analyst Ming-Chi Kuo of KGI Securities.

This report is reminiscent of an earlier Bloomberg report, that Apple may consider offering a dual-SIM in its largest 6.5″ OLED iPhone in at least some regions. In the note, Kuo has mentioned that both the larger OLED and LCD models of iPhones will support DSDS (dual-SIM dual standby), but at least one of the three iPhones coming in 2018 would offer the feature.

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Kuo believes that the 6.1″ LCD dual-SIM iPhone could be priced between $650 to $750, while the single SIM LCD model could be relatively cheaper tagged at $550 to $650. The other two devices to arrive in 2018 will be significantly more expensive.

Apple $550 iPhone: Appears A Shady Decision

Apple is planning to introduce three new iPhones in 2018, the 5.8″ OLED model likely to be called iPhone X2, the 6.1″ LCD iPhone, and the phablet-focused device which can be referred to as ‘iPhone X Plus’. Also, a recent iPhone leak has revealed that iPhone SE 2 is pretty much confirmed (maybe with a different name).

According to KGI, the new dual-SIM iPhone would create another price segment for the iPhone. This is the first time Apple will deploy dual-SIM technology in iPhones and at this price, it has the potential to be a game changer. This would help users to operate their iPhones in countries with different carriers without having to swap SIM cards. The feature is growing in popularity, especially Europe and commercial markets like China where business people routinely travel multiple countries.

Kuo has also said that Apple will use Intel’s XMM 7560 and Qualcomm’s Snapdragon X20 modems for blazing fast LTE speeds and DSDS devices will support LTE + LTE. He also predicts that 6.1″ LCD iPhone could clock sales up to 65-75% of the total iPhone shipments from Q3 2018 to Q3 2019.

Android has been a global leader in market share among other OSs worldwide and the share of iOS is consistently low. The dual-SIM iPhone model is ought to increase market share in Europe, China and other commercial markets where switching carriers are common in some parts. This is where Android has taken the lead.

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On the other hand, despite the comparatively low market share Apple’s latest flagship, iPhone X seized 5X share of handset industry profit than the combined profit share of 600 Android OEMs in Q4 2017.

The company’s tenth-anniversary handset iPhone X sales missed the industry expectations, its exorbitant price was one of the major reasons. To boost sales, Apple appears to have taken that one reason very seriously. History tells that Apple has never fidgeted with the pricing of its products to that level. A 6.1″ iPhone at $550, though sounds very alluring, is hard to believe. It would surely increase the sales but would fail to draw as much revenue due to a smaller profit margin Apple will have to settle with. For a very long period, Apple has been maintaining anything between 36% and 41% profit from iPhone sales. And despite the estimated lukewarm response to iPhone X in Q1 2018, Apple is showing no sign to compromise with its profit margin.

Besides, the availability of bigger screen iPhone with latest features and specs will have a direct impact on the sales of earlier models of iPhones – unless Apple decides to sell them at throw away price for less than $400. Considering Apple is successfully selling its three generation old iPhone for $400 – $450, it’s quite unlikely that Apple would announce a dramatic fall in the price of iPhones launched until last year.

All in all, Apple’s decision to launch a 6.1″ LCD iPhone at a price of $550 appears kind of shady.

Apple might also prefer to wait for the E-SIM technology (already exists in iPad and iWatch). With this feature, users can connect the iPhone with multiple networks without the need for a removable chip.

Furthermore, the upcoming iPhones are expected to have updated OS called iOS 12, which will be codenamed Peace.

All said and done, everything is at a speculation stage and we never know what’s cooking at Apple’s headquarter. If Apple decides to surprise us with $550 iPhone, it would definitely be an interesting move, and worth analysing. Till then stay tuned!

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