loading...

iPhone X-pensive: How Apple gets away with charging more each year for its flashy handsets

0

Apple has been known to charge a premium for its products, but it boggled minds everywhere when it released the $1,000 iPhone X last year. 

Apparently that price tag wasn’t too much for Apple fans to stomach, however, as the firm upped the ante with this year’s premium model, the iPhone Xs Max.

The iPhone Xs Max starts at a whopping $1,099 and costs as much as $1,499 for the model with 512 gigabytes of storage. 

 

It has become standard fare for Apple to charge more and more for its latest and greatest iPhone model each year. 

But last year’s launch was a remarkably big price jump, even for Apple. 

The iPhone 7 Plus, the high-end model launched in 2017, started at $769. A year later, Apple began selling the iPhone X, which was at the top tier of its lineup, for $999. 

Typically, Apple increases each subsequent iPhone model by about $100 per year, but last year it made a jump of $230, which was a shock to even the most loyal Apple consumers. 

Some have attributed the price jump to the rising cost of smartphone components, such as OLED screens and more advanced chips and sensors, all of which cost more to produce, especially at the scale Apple needs them. 

However, with component prices being lower than last year, that doesn’t seem to explain why Apple is charging more for its latest lineup of iPhones. 

Instead, it appears Apple may no longer be seeing its user base grow by leaps and bounds like it used to, hitting a plateau in developed markets like the US and Europe.

To keep generating steady profits, then, it has moved to squeeze more money out of existing iPhone owners by charging more for its new devices. 

All the while, Apple has to make sure to not alienate price-sensitive consumers, so it continues to offer lower-end models in its lineup. 

In 2017, that was the iPhone 8/8 Plus, which maintained roughly the same prices as previous models, with price tags of $699 and $799, respectively. 

This year, it tried to appeal to all consumers by offering the $749 iPhone Xr. 

The iPhone Xr is able to keep its more modest price tag because it features an LCD screen, instead of an OLED display, among other differences. 

Apple introduced a tiered iPhone lineup with the launch of the $749 iPhone 6 Plus in 2014. With that move, it began appealing to consumers who were willing to pay more for a bigger device. 

‘Apple has been intentionally testing the price elasticity of its products in the past few years, and what it found is customers have an appetite for more expensive iPhones,’ Wayne Liam, an analyst at IHS Markit, told CNN Tech. 

Chinese consumers are especially willing to spring for the top-tier iPhone model, as the Apple brand is viewed as a luxury in the country. 

Plus-sized phones also tend to sell better there, so it makes sense that Apple rolled out an ever bigger iPhone this time around. 

The iPhone Xs Max is Apple’s biggest smartphone ever, boasting a massive 6.5-inch, edge-to-edge display.     

‘I think the Xs Max in gold is going to be a tremendous seller in China,’ Avi Greengart, research director at GlobalData, told CNN. 

‘The preference there is for size and color and utility and a bit of luxury.’ 

And if US consumers think they’re paying a pretty penny for the nearly $1,500 iPhone Xs Max with 512gb, they’d better think again.

Consumers who live in other parts of the world will be forced to pay even more for the premium device. 

For example, in China, Russia and the UK, the Xs Max model with the most storage goes for $1,860 and up. 

That’s not the worst, however. Buyers in Italy will have to shell out a stunning $1,971 for the iPhone Xs Max that can store 512 gigs. 

 

 

loading...
Share.

Leave A Reply