Smartphones are not cheap, with the least expensive iPhone 7 starting at $649. Unfortunately for consumers, they may be getting more expensive. The iPhone 8 is set to debut on Tuesday, Sept. 12, and rumours peg the device’s starting price tag at $1,000, a significant bump from its predecessors.
The big question is: Will this drive customers away? According to a self-selected survey of over 15,475 Yahoo Finance readers, just 33.6% said they would pay $1,000 for an iPhone.
Should the rumours turn out to be correct, the iPhone’s whopping 54% increase in price may give some consumers second thoughts. A 2015 survey conducted by Motorola of 6,000 smartphone owners found that a whopping 50% have experienced a cracked screen, and many people already find the stakes high for a $649 phone in a hazardous world. Clearly, there is a reason why the phone case business is a $12 billion business annually and growing.
‘I would say $800 would be my top end for the iPhone 8’
Apple’s dominance with high-end smartphones in the U.S. gives the company great leeway to dictate its own terms, for example removing the headphone jack. Though an unpopular decision, Apple knew many customers wouldn’t depart to an entirely new system over something so minor. Apple appears to have made the same calculus with a $1,000+ iPhone, though a more affordable update to the current 7 is rumoured.
At the same time, however, 47% people said they would upgrade imminently and an additional 29% said they would upgrade eventually, indicating that many iPhone users are in for a tough decision, considering many of these same people said they would not pay for a $1,000 phone.
“I would say $800 would be my top end for the iPhone 8,” Matt Malmon, an iPhone user, told Yahoo Finance. If the top end phone is indeed $1,000, Malmon said he would likely go with an older 7, which may be on sale when the 8 comes out. “The 7 with a contract for X amount of years may be more practical than a new 8.”
A survey from RBC Capital Markets found that 78% said they would pay $800 for the new iPhone, but that 85% of respondents would purchase with a payment plan or lease, which would lessen the sting from a hefty price.
Many iPhone users Yahoo Finance spoke with noted that iPhones are frequently close to $1,000 despite their lowest starting price. An iPhone 7 Plus with extra storage is already up there.
”I was forced to buy the 256GB model after I got tired of waiting [for a 128GB version],” said Zachariah Stevens. “This cost me $969, so paying $1,000 for me isn’t a big jump from the 7 Plus 256GB I bought.“
A question some of these users have, however, is how much storage will be present on the cheapest flagship phones. If the price differential is already $300, the fully loaded phones may top $1,300. This steep price was the highest any survey respondent said they would pay for a phone.
As the new iPhone is unannounced, it’s unclear exactly what features it’ll have. However, many readers pointed to a desire for “plain” features like better battery life and an unbreakable screen. If Apple implements these features, it will increase the life and future utility of the phone. That would increase its value — and the maximum price people will pay for it.