The countdown has begun for Apple’s biggest tech event of the year on September 12. The world’s most valuable company will reportedly launch three new iPhone models — a 5.8-inch iPhone Xs, a 6.5-inch iPhone Xs Plus and a 6.1-inch iPhone Xc that will be a successor to the iPhone 8. But the most anticipated model of the three is a 6.5-inch iPhone Xs Plus- or iPhone Xs Max, iPhone X2 Plus, or whatever Apple ends up calling the super-sized version.
While the 5.8-inch iPhone Xs (which will be a follow up to the iPhone X) and 6.1-inch LCD iPhone model will target regular and mainstream customers, a 6.5-inch model is going to be the top-end model. A note from Bank of America Merrill Lynch, shared by CNBC, suggests that the 6.5-inch iPhone Xs Plus may end up costing $1,049 (Rs 75,368 approx.) for the base model.
The question is, why Apple wants to launch a 6.5-inch iPhone Xs Plus? Who will buy the iPhone Xs Plus? We tried to come up with three possible reasons behind the rumoured launch of the iPhone Xs Plus.
iPhone Xs Plus may help drive strong ASP growth
When Apple launched the iPhone X last fall, many thought the device would be a hard sell owing to its $1000 price (Rs 72,105 approx.). It turns out the critics were wrong. While iPhone sales growth have slowed a bit – the more expensive iPhone X helped Apple maximise profitability. In the past quarter, Apple’s iPhone average selling price (ASP) rose by $118 (Rs 8,508) yearly to $724 (Rs 52,204 approx.), beating expectations.
The success of the iPhone X proved that Apple has a fair idea of how to market and sell a $1000 phone to the right customers. The higher price tag of iPhone X and its acceptance could be the reason why analysts are predicting that the asking price of iPhone Xs Plus to start at $1049 (Rs 75,368 approx.). That’s almost $50 more than the price of iPhone X. Now you know why Apple doesn’t need to sell cheap iPhones to increase revenue and profit margins.
iPhone Xs Plus could be targeted at the Chinese market
With the iPhone Xs Plus, Apple could be chasing loyal, influential Chinese consumers. This is one market where Apple has done reasonably well, in spite of the competition from Xiaomi, Huawei and other local players. Its iPhone X was one of the top-selling smartphones in the March quarter despite being sold for 8,388 yuan ($1,319 approx.) in the Chinese mainland market. The success of iPhone X shows that price is not a major concern for Chinese consumers.
Based on leaks, iPhone Xs Plus will probably look identical to the iPhone Xs, featuring the same glass back and dual-camera setup. But the highlight of the phone will be a 6.5-inch OLED display and in China, the bigger screen smartphones are popular. So it makes complete sense for Apple to offer a 6.5-inch iPhone at steep price to attract potential customers.
Also, if you are not familiar, China has a deep influence on Apple’s product lineup. When Apple introduced the iPhone 5s in “rose gold” in 2013 – many saw the Chinese connection, where consumers have a long-standing love affair with the precious metal. The gold coloured iPhone 5s was not the only product designed keeping the Chinese consumers in mind. The iPhone 6 and iPhone 6 Plus and a 18-carat rose gold Apple Watch Edition were offered to consumers to increase sales in China, one of Apple’s most important and challenging markets.
There is a market for a $1000 smartphone
Your chances of spending money on a $1000 phone is more than ever now. And in this segment, the iPhone X dominates. The ultra high-end segment wasn’t new or unheard of, it’s just that most people hadn’t thought about getting a $1000 smartphone. Apple saw the opportunity and launched the iPhone X costing $1000.
Huawei, the world’s second largest smartphone maker in the world, recently announced that it sold 10 million units of the P20 and P20 Pro globally in a matter of five months. The company claims the high-end P20 series continues to remain popular in the Western Europe and China. Out of the two phones, the P20 Pro costs €899 (Rs 75,009 approx.). Next month, Huawei plans to launch the Mate 20 and Mate 20 Pro at similar prices. Another Chinese company Oppo introduced its Find X, a phone priced at €999 (Rs 83,535 approx.) for the basic edition and €1,599(Rs 1,33,414 approx.) for a special Lamborghini edition.
Samsung too is keen to sell a phone costing $1000. The Galaxy Note 9, which features a 6.4-inch display and up to 512GB of internal storage, cost $999.99 (Rs 72,104 approx.) for the 128GB storage option and $1,249.99 (Rs 90,130 approx.) for the larger model.
Not just China alone, the ultra premium smartphone segment is booming in India, one of the fastest growing mobile phone markets in the world. According to Hong Kong-based research firm Counterpoint, the premium smartphone segment in India is expected to grow 20 per cent in 2018. For Apple, Samsung or any other big player, status-conscious Indian consumers might be willing to splash out that much cash on a phone. Though such devices are not unlikely to drive sales volume.
As a consumer, would you spend $1,000+ on a phone when you could get a laptop for the price? Let us know what do you think about the rising price of high-end smartphones in the comments section below.