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Apple, Inc. Might Walk Back This Key iPhone Strategy | Madison.com

For years, a key pillar of Apple’s (NASDAQ: AAPL) iPhone pricing strategy has been to sequentially cascade models down to successively lower price points each year following the release of new models. This has been crucial for a number of reasons. Doing so allowed Apple to address lower and more affordable price points, bolstering unit sales. The company was also able to get unrivaled bang for its development buck, since each model was typically sold for three years (or more, in some cases). No other smartphone vendor can viably sell aging smartphones in comparable volumes.

KGI Securities analyst Ming-Chi Kuo issued a research note today (via MacRumors) that argues Apple will discontinue the first-generation iPhone X later this year, adding some additional detail after initially making that prediction last week. It’s worth noting that Kuo isn’t the only analyst who believes Apple will kill the first-generation model: Rosenblatt Securities analyst Jun Zhang thinks the same thing.

Kuo believes there would be cannibalization risk if Apple were to offer the iPhone X at a lower price, as Apple is expected to launch a 6.1-inch iPhone including Face ID but with a traditional LCD display panel instead of an OLED display panel. Keeping some features like an OLED display exclusive to only the high-end flagship also helps differentiate that model, justifying the premium $999 starting price tag that has attracted so much controversy.

Offering iPhone X at a lower price point could be “negative to product brand value,” in Kuo’s view.

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Apple, Inc. Might Walk Back This Key iPhone Strategy | Business Markets and Stocks News | host.madison.com.