The iPhone 6 is likely bound for an unveiling in the next couple of weeks, but word that it might cost significantly more than previous generations has some people thinking twice about camping out in line for the next iPhone. The total cost of the iPhone 6 shouldn’t give you pause, though, because you’ve almost always paid more for Apple’s phone than you think you have.
Apple’s iPhone 6 will likely be revealed at a media event two weeks from now, and it will probably launch 10 days after that on September 19. The Cupertino smartphone king is expected to show off two new models of iPhone – one with a 4.7-inch screen and another with a 5.5-inch screen – as well as a lower-cost option in the vein of the iPhone 5c. Those bigger screen sizes, though, could be the very thing that raises the cost of the iPhone 6.
An article in the Huffington Post pointed to a report from Jeffries financial analyst Peter Misek saying that Apple is negotiating with carriers to up the price for the iPhone 6 to $299 with a two-year contract. The reason: the iPhone 6 will be bigger, meaning higher material costs.
HuffPo also points to the thinness of the iPhone 6, as well as its reliance on an “unbreakable” sapphire crystal display and a more powerful A8 processor. The publication also noted that the fact that its hands were down the back of its pants does not necessarily mean that it’s pulling these reasons out of its backside.
Here’s the issue with “inside information” from financial analysts: it’s never quite as “inside” as they would have you believe. Misek says Apple is negotiating a $100 higher price for the iPhone 6, yes. Last year, though, Misek predicted that Apple would hold a television-themed event in March to show off a new Apple TV set-top box.
That event never materialized.
In 2011, Misek said that Apple was going to launch an HDTV by mid-2012.
That HDTV never materialized.
In late 2013, Misek predicted that the larger-screened iPhone 6 would launch in June of this year.
You may be sensing a pattern here.
Another issue with the “$100 more expensive iPhone 6” rumor is that it doesn’t take into account the way smartphone sales are handled in the United States. Consumers don’t pay the full cost of a phone up front; they amortize the total cost over the lifespan of a contract. That’s why an iPhone 5s doesn’t cost anywhere near its full retail value when you stroll into an Apple Store or AT&T branch to pick it up. That’s why you can now pick up an iPhone 5c for under a buck. You wind up paying the full cost of the phone and more over the life of your wireless contract.
If there were an up-front price increase, it would probably come only because the wireless carriers – AT&T, T-Mobile, Verizon, and No-Really-Sprint-Is-Your-Carrier?-What-Went-Wrong? – had a falling out with Apple and were less willing to front the cost of an iPhone going forward. That’s not a thing that happens. There are two reasons for that.
First, until a new iPhone model flops horribly – no, the iPhone 5c did not flop – the carriers will gladly line up to carry Apple’s newest smartphone. If that new iPhone model sports a fresh hardware redesign as well, they’ll line up with smiles on their faces and then watch as the customers, in turn, line up in front of their stores on launch day.
Second, no carrier has the stones to have a falling out with Apple. Consumers love the iPhone. They will likely love the iPhone 6. Consumers hate their carriers. Wireless carriers, year after year, score horribly in customer service ratings.
How powerful is Apple compared to wireless carriers? T-Mobile basically declared a national holiday last year when it got the iPhone 5, a device that was coming up on a year old by that point. The “UNcarrier” had spent billions building out its network in order to be able to carry the iPhone. China Mobile, the largest carrier in the world, spent nearly $7 billion building out its wireless infrastructure, mostly so that it could finally start carrying the iPhone. That’s how powerful Apple’s iPhone is.
In short, even if the iPhone 6 costs more to manufacture, it’s unlikely that you’ll see any difference in the price you pay for the device up front. Higher capacity iPhone models might well cost more, but that’s in keeping with the way things are right now. This talk of tacking on an extra $100 to the cost of entry, though, is about as believable as the records of the financial analysts that predicted it.
[Images via 9to5Mac and CBS News.]