Just a few days ago, a credible report from The New York Times came in claiming that Apple (NASDAQ: AAPL) plans to charge $999 for the entry-level variant of its upcoming premium iPhone, commonly referred to as the iPhone 8.
Based on this, as well as the rumor that Apple will only offer its upcoming iPhone 7s and iPhone 7s Plus in 64GB and 256GB storage configurations (though the premium iPhone could get a 512GB configuration), here's how I expect Apple to price its upcoming iPhone product line.
Image source: Apple.
Nothing out of the ordinary
I expect Apple to price the 64GB iPhone 7s at $649, with the 256GB model coming in at $749 -- exactly how Apple prices the iPhone 7 today. Along those lines, I also expect the iPhone 7s Plus to start at $769 for the 64GB model, with the 256GB version being priced at $869 -- again, coming in at similar price points to the currently available 32GB and 128GB iPhone 7 Plus models, respectively.
Apple could then price the entry-level premium iPhone with 64GB of storage at $999, as rumored by The New York Times. From there, Apple could either opt to charge an additional $100 for each incremental storage tier (yielding a 256GB variant at $1,099 and a 512GB variant at $1,199), or it could choose to charge a bit more for each incremental storage tier on the premium model (say, $1,149 for the 256GB model and $1,299 for the 512GB version).
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Often, a studio feels like a sacrifice. That’s not the case at Sailwinds in Winter Haven, FL. The studio apartments have a savvy, space-conscious design and premium materials like plank flooring. Plus, if you’re looking to get the most out of your rental budget, the community offers two-bedroom apartments for less than an iPhone 7 too: $730/month! Whichever unit you choose, you’re guaranteed to enjoy the serenity that comes with being nestled next to picturesque Lake Deer.
Enjoy a hip, refurbished apartment within walking distance to everything in downtown Sioux Falls, SD, without breaking your budget. Located in the old YMCA building, the newly renovated apartments have a classic design, with some industrial-chic touches (like exposed air-conditioning ducts) that give plenty of character. Plus, unlike typical affordable apartment communities, this one has a few special extras, like a fitness center, clubhouse, and pool.
If you’re the type who’s always up for a good time, this amenity-filled community in Houston, TX, is for you. The 24-hour HarborFit fitness center lets you squeeze in workouts that fit your schedule, the swimming pool and sun deck were designed for relaxation, the bark park lets your pooch get to know the neighbors, and the business center sets a heavenly scene for work-from-home days with its free Wi-Fi and coffee bar. When you finally retire to your apartment, you’ll enjoy a spacious layout and chic modern design — perfect for relaxing after an action-packed day.
The biggest luxury of all has to be peace and quiet. The Grove at Hickory Valley in Chattanooga, TN, was designed just for that, with a concrete structure and noise-reducing walls and floors. But don’t mistake “concrete” for “industrial” style. The all-new interiors are warm and cozy, with dark cabinets and countertops, hardwood-style floors, and on-trend hardware. Since neighbors will be seen and not heard, socializing at the community center and gym will be a joy.
Nature lovers will adore this place, which is located on a wooded ridge in the historic Bethabara Park area. But just because the setting is serenely rustic doesn’t mean you’re far off the beaten path. Since the community is located between I-40 and Winston-Salem, NC, you’re only a short drive to Wake Forest University and other major employers. In the summer, walk the mature, landscaped grounds and nearby park, and when the weather turns cool, head to the newly renovated fitness center for a high-intensity workout. Or just sit back and enjoy the views from your apartment.
Here’s proof that you can live in a bustling city and still save on rent. These apartments are located in northeast Las Vegas, NV, which means you get to enjoy spectacular views of both downtown and the always-fabulous Las Vegas Strip. The biggest draw, however, is the community amenities: sparkling pools and heavenly outdoor spa tubs, a 24-hour-access fitness center, a billiards room, a community library, a business center, and a tot lot for little ones. Basically, it’s the closest thing to living in one of the great Vegas resorts.
From the looks of this stately community, you’d expect a seriously high price tag. We also wouldn’t blame you if you thought the same thing after seeing the pet-friendly units, which have private entries, garages, ceramic tile foyers, electronic alarm systems, fireplaces, renovated gourmet kitchens, and stylish details like brushed-nickel finishes. Oh, yes, and the high-end gym and deluxe outdoor dining area. But the down-to-earth monthly rent makes it possible to enjoy these features, along with all the fun of nearby historic downtown Savannah, GA, without breaking your budget.
You usually have to go far from campus to find an affordable apartment that isn’t geared to students (read: tiny), but Renaissance gives you surprisingly spacious digs close to Fresno State University’s campus in Fresno, CA. You’ll find roomy 700-square-foot one-bedroom apartments at this price, which also include a private balcony or patio, custom carpet and window coverings, generous closet space, and an upgraded kitchen with gas range. Even if your student days are behind you, you’ll love the convenient location near Highway 41 and all the major shopping centers.
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Given the kinds of customers Apple will be targeting with the higher storage tiers of the premium iPhone (e.g., hardcore iPhone enthusiasts and individuals whose financial situations allow them to buy "the best" without batting an eye), I think such a storage premium for the different premium iPhone tiers would work out fine in the marketplace.
This product stack would be great
The product stack I described above could be quite effective in pushing current iPhone users to upgrade to new models.
Not only would pricing the iPhone 7s and iPhone 7s Plus at the levels described here increase the value delivered to consumers compared to the current iPhone 7 and iPhone 7 Plus lineup in terms of storage (let alone all of the other feature upgrades that Apple will surely bring to the iPhone 7s and iPhone 7s Plus compared to their predecessors), but the smooth transition from the 256GB iPhone 7s Plus to the 64GB premium iPhone in the product stack should encourage customers to spend a bit more, as well.
The net effect I expect it all to have on Apple's iPhone business is twofold. I expect both iPhone average selling price increases (as many users shift to the $999+ premium iPhone models) as well as unit shipment increases due to both the compelling feature set of the OLED iPhone as well as the dramatically better value for the money that the upcoming iPhone 7s and iPhone 7s Plus should deliver over their predecessors.