Apple is expected to launch a redesigned iPhone model this fall based around a next-generation display technology called OLED, and Wall Street analysts believe it could cost a lot more than the iPhone 7 and iPhone 7 Plus.
Currently, the entry price for an iPhone 7 is $650.
Why are Wall Street analysts suggesting that the next iPhone could more than before? Because the companies that make parts for iPhones are saying that the components Apple is ordering are more expensive than before.
UBS analysts summarize this trend in one simple chart in a note distributed to clients on Monday:
UBS analyst Steven Milunovich believes the redesigned iPhone expected to launch this fall will be priced at $850 to $900 in a separate note distributed on Monday.
He also believes Apple might launch two other devices this fall that are more similar to the current iPhone 7 and iPhone 7 Plus, without pricey OLED screens.
“The question then becomes how the non-OLED models are priced. Will there be enough people willing to pay $650-770 for incremental innovation? Apple could be forced to make a difficult pricing decision, especially in markets like China where the $400-500 premium handset market is increasingly competitive,” Milunovich writes.
UBS analysts believe, based on industry checks, that the less-exciting iPhone models could launch before the redesigned iPhone and will go into production first.
“Nonetheless, our checks suggest the OLED iPhone 8 assembly service procurement schedule has been planned for a ramp up in October 2017. This is not a delay but but planned. We believe this could be due to the time needed to finalize many innovative new designs. Two other new models could start ramping up production from August 2017. These two models might become available ahead of the OLED iPhone8, but we have no visibility on whether Apple will announce all three models at the same time, even though we believe it makes sense to do so.”