Rumor Mill: Apple to charge carriers $100 more for iPhone 6
Apple (NASDAQ:AAPL) is contemplating charging $100 extra for the iPhone 6, according to a financial analyst.
According to Business Insider, Jefferies analyst Peter Misek wrote in a recent research note: "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."
An Apple spokeswoman did not immediately respond to a request for comment.
Several of Apple's competitors have already released their flagship smartphones for the year. HTC's One M8 and Samsung Electronics' Galaxy S5 just went on sale. Both are evolutions of last year's flagship models with software and design enhancements and both companies are hoping they can ride those models to stronger sales growth. HTC, in particular, needs the One M8 to bring in more revenue than its predecessor did. Meanwhile, LG Electronics is expected to unveil its G3 smartphone later this year and Nokia (NYSE:NOK) will likely introduce a new flagship Lumia Windows Phone.
It's not clear that carriers would agree to a significant price bump request from Apple, which could make a 16 GB iPhone cost $299 with a two-year contract. Presumably, Apple's long-term contracts with carriers have prices that are already set. Further, carriers in the U.S. are starting to shift away from subsidizing smartphones in exchange for two-year contracts, and are instead financing the full cost of phones via monthly payments. A more expensive iPhone could turn consumers off if they see that increased cost on their monthly bill.
Meanwhile, the smartphone market is moving away from expensive, high-end phones in many markets, especially emerging markets--and Apple has acknowledged this shift. According to an April 2013 document released as part of Apple's patent-infringement trial against Samsung, Apple concludes that "customers want what we don't have," and that growth in the smartphone market is primarily coming from phones that cost less than $300 on an unsubsidized basis or phones that have screens larger than four inches.
Apple could potentially be pushing for a price bump to offset the cost of making a larger-screened iPhone. Rumors that Apple will be producing larger-screened iPhones have been popping up for nearly a year. Recently, unnamed sources at Apple suppliers told Reuters they will begin mass producing displays as early as May for the next iPhone, expected to be launched this fall and called the iPhone 6. According to the report, one model will have a 4.7-inch screen likely to be produced first, while a 5.5-inch model could be delayed.
The report said Japan Display, Sharp and LG Display have been chosen as the suppliers for the screens. The iPhone 5s and 5c both have 4-inch screens.
- see this Business Insider article
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