Apple's New $1,000 iPhone a Sign of Confidence

Equity analysts think that customer loyalty will allow the firm to pass along iPhone X price increases without a significant decline in sales

Brian Colello, CPA 13 September, 2017 | 8:36AM
Facebook Twitter LinkedIn

Apple iPhone X

Apple's (AAPL) latest iPhone launch reinforces equity analysts long-term thesis that customer switching costs should enable Apple to retain most of its user base over time. The firm simply would not be able to introduce a $999-plus iPhone within the cutthroat smartphone market without a great deal of confidence in the stickiness of its customers.

The iPhone X, representing the roman numeral 10, not the letter, is Apple's long rumoured 10th anniversary iPhone at a starting price of $999, although we foresee the greater storage version being more popular at $1,149, and $1,348. Apple also introduced the iPhone 8 and 8 Plus, which we view as more traditional enhancements of last year's iPhone 7 series, but we should note a $50 boost in entry level pricing to $699 for the iPhone 8, as well as a $150 jump in pricing to higher storage models, versus $100 increases in years past. On the whole, we view Apple's iPhone pricing as a net positive, as we think that customer stickiness will allow the firm to pass along these price increases without a significant corresponding decline in unit sales.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Apple Inc148.91 USD0.14Rating

About Author

Brian Colello, CPA  is a senior stock analyst with Morningstar.