Rumors are rife that the upcoming iPhone 8 may cost upward of $1,000. However, an analyst forecasts that the next-gen Apple handset may not be so expensive.
According to an analyst from UBS, which provides financial services, the price of the iPhone may not hit four figures as speculated previously.
iPhone 8 To Boast $1,000 Price Tag: Older Claims
Earlier in February, rumors that the iPhone 8 will cost $1,000 emerged online. It was speculated that the iPhone 8 would command the steep price owing to the top-notch features.
Rumors regarding improved features, including the transition to an OLED screen, an iris scanner, and other design changes, fueled the steep price tag assertions. All these factors when considered together gave the impression that the iPhone 8 would be considerably costlier, and could even cross the $1,000 mark.
UBS Report: What Do The Analysts Predict?
UBS assumes that the factory cost of the 64 GB variant of the iPhone 8 will be roughly $70 to $90 more than the iPhone 7 Plus.
The selling price of the device is speculated to be between $850 and $900, which is more than the price of the iPhone 7 Plus, but lower than earlier estimates. The 256 GB model of the handset will set consumers back by $950 to $1000 according to analysts. By comparison, the current-gen 256 GB variant of the iPhone 7 Plus costs $970.
The increased price of the iPhone 8 is expected to impact Apple's gross margin, which may decline from 38.7 percent for the current fiscal year, to 38.5 percent in fiscal year 2018.
"We think an $870 price would be accretive to EPS but dilutive to gross margin, a dynamic Apple has said it would accept," noted UBS.
Compared with the Samsung Galaxy S8 and Galaxy S8+, which are priced at $720 and $840 respectively, UBS analysts indicate the iPhone 8 will be significantly costlier.
However, for iPhone fans, the $870 price tag would perhaps be acceptable, especially since the smartphone is rumored to pack in innovative features like a 3D facial scanner, as well as an embedded fingerprint scanner.
These state-of-the-art design choices and specs would possibly justify the supposed price difference between Apple's upcoming iPhone 8 and previous iterations of iPhones.
However, Apple may face some stiff competition in sales from rival Samsung as the Galaxy S8 comes with a much bigger 5.8-inch display, as opposed to the rumored 5.1- or 5.2-inch screen of the iPhone 8.
The analysts, however, believe that Apple will take into consideration this aspect.
"We still think Apple will choose to price its top model relative to Samsung's top model, but remain cautious on how much higher Apple could ultimately go on price given a smaller display," says UBS analyst Steven Milunovich.
It is interesting to note that the iPhone 7 Plus, which was priced $20 more than its predecessor iPhone 6 Plus, fared well in the market despite the price hike.
