Apple Might Increase the Price of the Upcoming iPhone 6
The iPhone 6 rumor mill continues to heat up among everybody from armchair Apple (NASDAQ: AAPL) watchers to the analyst community.
Wednesday, a new report by Susquehanna analyst Chris Caso made headlines, detailing the latest rumors surrounding Apple’s next phone.
According to Caso, the iPhone 6 will likely have a larger screen and a faster chip. Neither of those facts are new revelations but the rumor not widely known is that that larger screen could be manufactured using Sapphire—the same material used in the 5S’s camera lens and fingerprint-recognition buttons.
Earlier this month, Apple announced that it had entered into a multiyear agreement with GT Advanced Technologies that will see the company manufacture the sapphire material at an Apple facility in Mesa, Arizona. The deal, worth about $578 million, will increase the small company’s revenues dramatically—from $28.9 million this year to as high as $800 million next year.
Apple plans to expand the use of sapphire and as the Susquehanna research note suggests, the expansion may be to replace Corning's (NYSE: GLW) Gorilla glass with a sapphire screen.
But the other notable part of the report suggests a possible price increase. Apple has found itself under fire as its margins have diminished over the past couple of years. Still quite impressive, investors want to see the down tick stabilize.
The bigger screen and the pricier components already present in the iPhone 5S may cause Apple to raise the price on the iPhone 6 by $50 to $100. That would make the now $199 subsidized cost of the base iPhone 5S (with contract) come in at $249 to $299.
That would break Apple’s streak of keeping the same price tag of its next generation iPhone but the company doesn’t seem to value that tradition so strongly that it will take a profit-hit much longer. It raised the price of the new iPad mini by $70 to account for the retina display.
Then there’s the name. Rumor mills seem certain that the new iPhone will be called the iPhone 6 but even that could change. For now, and likely well into the future, iPhone 6 will likely be the working name for the newest iPhone that may place Apple into the “phablet” market.
Disclosure: At the time of this writing, Tim Parker was long Apple
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