One of the most popular and high priced technological devices available on the market, Apple are reportedly set to increase the prices on their iPhone further.
Very few people on the Internet will argue with you on the idea that we pay high prices for a premium in quality. It’s what keeps the low quality imposters out and it’s what keeps our wallets empty. Perhaps it seems unfair in a market with a multitude of low and high end gadgets that all seem to do the same thing, particularly in terms of smartphones (they all make calls!) but it’s unfortunately how the economy works. One of the prominent examples of this is the iPhone, which Apple release iterations of year upon year for a high price. Now, it looks as though Apple are set to increase the price of their smartphone even further.
The news of a price hike comes from Investor’s Business Daily who say that although the price has been fairly consistent with all iPhone iterations since the iPhone 3G, that was released all the way back in 2008, that could be set to change with the release of the ‘iPhone 6’ next year. According to Chris Caso, an analyst at Susquehanna Financial Group, the reason for the price increase lies in Apple’s profit margins. Caso states that due to the profit margin erosion that occurred with the iPhone 5 in 2012, Apple are upping the cost of the phone at retail to avoid that happening again.
Part of the reason for the increased cost is due to materials, as Caso explains, saying that “When iPhone 5 was launched, Apple’s phone margins declined because the new features (most notably the display) added cost to the bill of materials, yet the price point of the phone remained unchanged. Since we’re expecting a host of new features in the iPhone 6 (including a larger screen), we expect the bill of materials cost of the phone to increase as well.” The iPhone 6 has yet to be announced so this cannot be confirmed, but it seems likely due to the current $100 plus pricing of the phones.
We’ll keep you posted once we know more.
Source: Investor’s Business Daily
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