Apple is a company that's well known for pushing the price envelope. It commands a price point and profit margin for the iPhone, iPad, iMac, and MacBooks that other companies could only dream of for their products. But Samsung has beaten Apple at its own game by unleashing on the world a $1,250 Galaxy Note 9 and kicked off a price war which, rather than resulting in lower prices, I see leading to a $2,000 iPhone.
But would anyone spend that sort of money on an iPhone? I think enough people would if the specs were right.
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Let's take a look at the iPhone X pricing structure, and compare it against the Galaxy Note 9.
The 64GB iPhone X has a contract-free price tag of $999, rising to $1,249 for the 256GB variant.
Samsung's pricing for the Note 9 is more aggressive in both directions. First off, the base 128GB model comes in at $999.99, giving buyers twice as much storage as the base model iPhone X offers, along with the microSD card expansion option.
On the other end of the spectrum is the 512GB model, with comes in at $1,249.99. So for $250 more, those opting for the higher Note 9 model will enjoy half a terabyte of storage, 8GB of RAM, and have the ability to bump that storage up to a whole terabyte if they throw in a 512GB microSD card (a 512GB microSD card retails for around $350, so they're not cheap).
So the bottom line is that the Note 9 offers more for the same price as the higher-capacity iPhone X. More storage. More RAM. Most screen real-estate (6.4-inch 2960 x 1440 for the Note 9 compared to 5.8-inch 2436 x 1125 for the iPhone X). An "all-day battery."
The Galaxy Note 9 is a flagship smartphone in every sense of the word.
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Now, rumor has it that Apple is preparing to launch three new iPhones. One will be a budget version of the iPhone X with an edge-to-edge display and Face ID to replace the iPhone 8/8 Plus, an updated version of the iPhone X, and a super-sized iPhone with a display "close to 6.5 inches" that would sit atop the iPhone X in terms of spec.
And there are analysts who expect that super-sized iPhone X to have a starting price of $1,199. If we assume this to be a 64GB version, then a 256GB model would have a price tag of $1,450.
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And if Apple were to copy Samsung and release a 512GB model for those who want a super-high-capacity iPhone, it wouldn't surprise me in the least if that came with the very robust price tag of $1,699.
Think that price tag is crazy? Well, a 12.6-inch cellular iPad Pro with 512GB of storage is $1,279.
And that doesn't have an OLED display, doesn't have Face ID, doesn't have wireless charging, doesn't have all the other camera bells-and-whistles, and isn't an iPhone.
And remember, people are buying higher-specced/higher-priced iPhones. In fact, it's higher-priced iPhones that are buoying revenues over the past quarters. During the last quarter this trend drove the iPhone's Average Selling Price (ASP) to $724, comfortably beating the predicted ASP of $699.
When we end up with a $2,000 iPhone -- and as growth stagnates in the mobile market, I believe we will see this in the next few years -- we only have ourselves to blame.
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In less than a year we've normalized the $1,000 price barrier.
While I can't see myself spending $2,000 on an iPhone, as people consolidate their tech down from desktop and laptops to smaller, more personal devices, I can see a growing market for a single device with the power to do everything, and a lifespan of a few years being appealing to enough people to make its R&D worthwhile.
A $2,000 iPhone is coming. I can feel it.
Would you spend $2,000 on an iPhone? Let me know!
What features would a $2,000 iPhone need to make it irresistible?