iPhone 8 pricing: How high can Apple go?

AirPods charging case with Lunies leather keychain case
AirPods charging case with Lunies leather keychain case

John Gruber has a great post up on Daring Fireball summing up a lot of the thinking that's been buzzing around about the next-generation iPhone since it was first rumored over two-and-a-half years ago. Namely that, like with the MacBook in 2015, if Apple wants to seriously push the boundaries of new technologies, the company has to do it in a device that's both more expensive and, thus, more niche. It's the only way to balance the higher production costs and lower yield rates with what would otherwise be much higher demand.

In other words, it's the strategy Apple uses to bring tomorrow's products to market today — and test upper price elasticity at the same time. (iPhone 7 Plus showed we'll spend $20 more for a much better camera, so much more will we spend for a much better camera, display, sensors, and charging options?)

What John also does, and does well, is stick a number on that price point. Some previous rumors had pegged the starting price at anywhere between $869 ($100 more than the current Plus model) and $999. John thinks it could be higher.

Let's take a serious look at this. $1,500 as a starting price is probably way too high. But I think $1,200 is quite likely as the starting price, with the high-end model at $1,300 or $1,400.

John thought similarly about the old, gold, Apple Watch Edition and he was right. There's a difference between Apple Watch, and iPhone, though.

Apple Watch has identical features between models but different levels of material. You can get in with aluminum and ion-exchange glass for a few hundred dollars. If you want stainless steel and sapphire crystal — or ceramics or a Hermès band — you'll pay anywhere from a few hundred to a thousand more.

I used MacBook as an example before but that's not right either. MacBook offered less for more. All that display and battery tech was in service of making a thinner, lighter experience. The rumors about the next-generation iPhone are about making a more futuristic one.

MacBook Pro almost fits. It has more features for more money. But a lot of those features revolve around power and performance — faster processor and more powerful graphics, for example. I haven't seen any rumors to suggest the next-generation iPhone will have a better A-series system-on-a-chip than the iPhone 7s or iPhone 7s Plus that launch roughly alongside it.

The next-generation iPhone – iPhone 8 for convenience until Apple marketing reveals a name for it — seems like it will be entirely differentiated by feature set. Namely, the aforementioned edge-to-edge, OLED display, proximity charging, and a facial identity sensor.

And it's as good a differentiator as any. Rather, it's as understandable a differentiator as material or power, both of which have already been accepted by the market.

Apple previously tested downward elasticity with an even more mass-market iPhone — iPhone 5c. It was plastic and pop-culture and meant to sit on shelves, enticingly, like an iPod. It managed the sitting part, but not much else. In hindsight, it wasn't the right approach for Apple's brand, at least back then.

There were also rumors preceding its launch that the original iPad would cost upwards of $1000 and it ultimately started at $500. Sometimes there's expectational credit rather than expectational dept.

Even if the higher price point is anywhere in the ballbark, it remains to be seen how successful an even more premium iPhone will be — not in terms of revenue, since it will be constrained by design — but in terms of moving the overall product forward.

My guess is that it'll play out much like the gold iPhone and AirPods did: With a lot of sensational naysaying and even mockery from the usual suspects, followed quickly by complaints they can't get it after launch.

Even at $999, $1,999, or more.

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

  • I love Apple products even though I know they're way too expensive. I paid more for the 7 Plus. And it's even more than the advertised American price because I'm Canadian, so if it were $999 to start, that's more like $1130. Canadian. But to start at $1200 American, and face it, who really buys the base model?, that's way more than I'm willing to spend on a phone, regardless of how bad I want one.
  • This is exactly my viewpoint as a Canadian. Unfortunately for us there isn’t a monthly price we can pay for the device. We pay much heftier prices up front and then pay even larger monthly charges for our plans. The price of an iPhone going up like that means more that we have to dish out up front. When I got the 128GB iPhone 7 Plus, it cost me $670 + tax ($771) up front, plus then an additional $21 a month for two years on a tab plan. That’s a substantial amount of money to put down for a new device.
  • "Namely, the aforementioned edge-to-edge, OLED display, proximity charging, and a facial identity sensor." These features (aside from proximity charging), I believe, are available in competitor devices, yet those devices aren't priced where this article suggests. What would justify Apple pricing their devices in such a manner?
  • Gotta pay that Apple tax lol
  • Quis89 - you are making a good point. It could be as simple as "because they can." If you want an iPhone, and want the best model, Apple is the only game in town. Samsung suffers from dozens of competitors, but Samsung as a competitor for Apple is much more restrained by the iOS walled garden which many of us are stuck in. This August/September may be an epic battle, but either way Apple will sell 80-100 million units, and Samsung wins by virtue of the Galaxy Note 8 and the OLED screens in those 80-100 million iPhone 8's.
  • Way too expensive. Just not going to fly with me, and with my iMac nearing "upgrade time," it would be unfortunate as that would have me buying a Windows PC, which would rule the iPhone out for the foreseeable future. On its own, the iPhone isn't' worth it. I've only continued upgrading because I have a Mac, as well. I can save a lot of money by switching back to a Windows Desktop and Android phone.
  • I don't think that the iPhone isn't worth it on its own, the iPhone is the only Apple product that I have and I won't use anything but an iPhone. Android is a hacked together mess whereas iOS is elegant in its software integration. Plus guaranteed software updates with iOS whereas with Android is very hit-and-miss.
  • For me it's not worth it without the other devices. I basically use ios for SMS/Call Relay and Continuity, as well as some apps that have iOS and macOS versions that work together. Without one or the other, it's not worth it for me to have either. Just how it is for me. Samsung devices aren't bad because I tend to: 1. Bias myself towards platform native and Microsoft Services 2. Not use redundant replacement apps for tasks my phone does fine on its own (mail and calendar apps, etc.) 3. I game on my PS4 So the value is all in the integration, not the brand, specific OS, or app store. Without that, I can build much better work flows on Windows. If the iPhone goes, I will have practically no use for the Mac, and it will feel like a paperweight compared to the flexibility Windows offers. Since I already have a Windows laptop, I can just reuse apps I've already bought and completely replace the Mac. I'd likely sell it on CL and fast track its upgrade cycle.
  • I don't see what flexibility Windows offers that macOS doesn't, aside from supporting more video games. Pretty sure most Microsoft apps are on macOS now too
  • I think Apple could charge even more as well, and people would pay whatever the price. Several indicators, including Rene's reference point of the 5c, show that the hard core Apple user wants to pay the highest price for all items. Apple has spent a true fortune on marketing to position itself as a premium brand. People not only expect to pay more, but want to as well.
  • No, they don't. They just want the latest greatest and can't help themselves.
  • So what's your point? Regardless if "they can't help themselves", Apple's price gets paid. To get to iOS, you gotta pay whatever price they decide for "the latest and the greatest" and millions of people will do it no matter the price tag.
  • I'm satisfied with my 6s Plus for now. I won't be upgrading. If I did, it would be the 7s Plus. Whatever new features the anniversary edition may have, it's not anything I have to have. Especially not with a jacked up price.
  • I think also a lot of it had to do with getting it on 2 year contract at reduced price. People are going to be more skeptical if they have a monthly payment of $45+ for the new iPhone with the increased price. I think using the excuse of having to charge more to include more higher end/pushing the boundaries is a weak excuse. Look what Samsung and others are including and still not coming close to the rumored price of the iPhone 8.
  • To be entirely fair, my S8+ cost just as much as my iPhone 7 Plus. Also, the Note 8 is rumored to push Samsung devices into a whole new price bracket as well, quite likely in the same range as the iPhone. Now, in reality Samsung almost always arranges for some kind of promotional deals to go with their devices, hence the buyer gets more value for their money.
  • The note justifies this a lot better than the iPhone. Stylus and digitizer in the display. Class leading display. Class leading cameras. A lot more sensors. You know, things that cost money and objectively raise the cost of the device. We paid more for iPhone 7... Why? Same boring design. Hardly anything changed... But even that was ignorance comlared to what Renee is talking about. At that price point, the phone won't even exist to me... The S8+ is only as much as the 7+ despite having better hardware, twice the base storage and an SD Card Slot. Unless you want 32GB, the 7+ is way more expensive than the S8+., and the comparative value just isn't there. The iPhone would have to offer the flexibility, value and productivity of a Surface Book to get me to pay $1,100 for a phone.
  • The "same boring design" is actually a very nice design, at least the speaker holes are aligned correctly. Not a huge amount of things changed in the iPhone 7 but there were some great changes, mainly to the camera but also to the screen and speakers, aside from that you have the usual changes such as a faster processor, better graphics performance and longer battery life. Maybe Apple held back a bit on the iPhone 7 to make way for the anniversary iPhone? It'd make sense
  • "...at least the speaker holes are aligned correctly...." Spoken like a true Apple fanboy (and before you erupt in fake anger, I've owned nothing but iPhones since 2007 - well, except for the failed try at Samsung Firephone - Note 7). But this quote also explains WHY they will be able to charge an exorbitant $1299 + for the iPhone 8 - there are plenty of fans who will pay to be sure the speaker grills are symmetrical...
  • And n8ter#AC speaks like a true Samsung fanboy, what are you trying to gain from saying this? People are paying for more than just symmetrical speaker grills, but it's certainly not a trivial thing, design is important to many people. I agree in that I think Apple products are charged too high, but you do get more than just "the same boring design"
  • No. I don't even own a Samsung product. I've had the past 3 iPhone Plus models. I use an iMac. Don't try to play tit4tat just because you tried to use a straw man to retort a valid point. I'm not anything approaching a Samsung or Apple fanboy, which is why I have no issues using any of their products - whichever I feel delivers best for the price being asked. If that isn't an iPhone, then that's not an issue with me being a fanboy. You aversion to it, however... Well, that speaks differently of you.
  • They're both great phones, I think they both have positives and negatives
  • And yes, I would totally skip the Note 8 and new iPhone for an S8+ if the prices are too high.
  • Apple really needs to think hard about this. I just got my dad a Galaxy S8, boy does that have everything you want. It's almost like everything the next iPhone will have too. Unless this thing makes my coffee and wipes my **** in the morning, it really needs to be priced competitively as well. I can understand 999$, but anything over is a bit pushing it.
  • $999 is basically $1100 in states with sales tax. Unless you can drive a few miles to avoid that, it's not really any different. $999 is the con artists manner of writing $1000. Its hilarious to see someone use the "99" as a red line for pricing.
  • Apple is getting way too expensive, not worth it and saying bye to Apple when there is way better competition out there at cheaper prices.
  • Apple has always been expensive, don't understand why people say this when it's nothing new. If you genuinely thought Apple was too expensive you would've never bought an Apple product to begin with
  • I'll have to rethink my upgrade this fall if the price will go over $1K. That just seems greedy.
  • I wouldn’t be surprised if it started at $850-900, with a $100 bump for a second higher tier storage. There is some price elasticity, but I don’t believe there’s that much that soon. Supply is constrained in the AirPods, but Apple didn’t use a huge price to moderate demand in those, so I’m skeptical they would go as high as Gruber is suggesting.
  • Guys don't worry Apple will win legal battle against Qualcomm and price will go down on Apple cellular products. Cough cough Rene.
  • They go that high and I'll wait for the iPhone 7 to die then go Samsung. I may love Apple's products but I am not going to be completely ripped off.
  • It really depends on what I'm getting for the extra money. I'd love to free up my Lightning port for audio (it is currently always occupied by a Lightning Qi charging sticker). So how much more would I pay for that? I already assume the 7S Plus is going to have a better camera, so the iPhone 8's camera would have to be even more groundbreaking to justify any price premium over the 7S Plus. I'd like to turn some of the bezel to screen, but that's something that can easily be put off a year; I'm used to the bezel now, and it isn't a nagging problem. If they get rid of the fingerprint sensor completely, I'd lean toward waiting a year for them to add it back under the screen. Every phone that uses facial recognition for unlocking crows about how great it is, but it's never actually great. Apple would have to buck that trend to make that a feature rather than yet another compromise.
  • No way I'm paying more than $1000 for something as ubiquitous as a smartphone in 2017. Throwaway tech should be priced like throwaway tech.
  • It's not throwaway for everyone, a lot of people use iPhones for their full 4 years of support, and some people use it for even longer than that
  • Apple's not breaking new ground here. The Porsche Design Huawei Mate 9 is $1395 Euro, or about $1600 USD. I see a special edition iPhone selling well, but clearly it won't be within everyone's budget. Apple will have a new iPhone priced in line with the iPhone 7, just like it did with every iteration.