Apple has rolled out the new iPhone X and it has grabbed a lot of eyeballs globally, not only because of its features but also due to its price. The price of the new iPhone X goes upto $1149, and in India, the ultra premium phone’s price has reached over Rs 1 lakh. While Apple is taking on other rival smartphone manufacturers like Samsung with the new iPhone X, iPhone 8, and iPhone 8 Plus, the truth of the matter is, it has always tried to break price barriers. Even Samsung is slowly and steadily catching upto the trend of supremely high priced flagship devices, like the Galaxy Note 8. While there is a lot of debate going on regarding the justification of the price hike, it is interesting to think why would Apple do so anyway?
Companies like Apple and Samsung are constantly innovating in their smartphones and the results are seen in every rendition of the devices. There is a vast difference between the iPhone, first introduced by Steve Jobs and the latest one announced by Tim Cook. While the iPhone in 2007 created a revolution in the market, the new iPhone X, 8, and 8 Plus offer a lot more in terms of features and specifications. However, we do not usually see the work that goes in the background. With a fast changing technology, it pays to keep up in the research area, but Apple also has to pay for actuaries, market researchers and more. Apple manages to do this, by generating a huge revenue on each iPhone it sells. A Bloomberg report has said that from the year 2009, the company has managed to generate $600 to $700 per iPhone. This report was based on Bloomberg Gadfly calculations of iPhone sales in rolling 12-month periods. While the sales and revenue graph has gone up and down in various years, the money Apple gets on each phone typically remains in this price bracket.
Apple has always found ways to push up its average sale price. In the iPhone 7 Plus, Apple managed to raise the price by $20 per device just by introducing a larger screen. Similarly, Apple made buyers pay a lot more by introducing different colours of the iPhone. According to the Bloomberg report, Apple sold just 2.2 percent more iPhones in the first 9 months of 2017 fiscal year but generated 3.3 percent more revenue. This is a clear indication of the increasing average price of iPhones.
Watch video: Apple iPhone X First Look
When it comes to the new iPhones, the upgraded versions-iPhone 8 and iPhone 8 Plus- are priced $50 and $30 more than the base price of the iPhone 7 and iPhone 7 Plus respectively. It should be noted that there is not much of a difference in the devices other than a few updates here and there, which could not have cost Apple that much. Add to this, the huge price point of the iPhone X, with which Apple is clearly targeting the iPhone loyalists. So, it is clear that Apple has probably broken even the high $700 barrier per iPhone.