Wednesday, September 26, 2018
Will Higher-Priced New iPhone Models Boost Rival Models’ Prices?
Higher Prices Than Expected
Will Higher-Priced New iPhone Models Boost Rival Models’ Prices?
  • By Michael Herh
  • September 14, 2018, 12:04
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The prices of new iPhone models are expected to drop due to lowered display prices but Apple did not lower them.
The prices of new iPhone models are expected to drop due to lowered display prices but Apple did not lower them.

Apple took the wraps off three new iPhone models, confirming that its high-price policy would remain unchanged. Apple unveiled a new model loaded with a 6.5-inch large screen that had never been adopted before. At the same time, many people were surprised to see a price tag of US$1,099 on one of the three new models. It remains to be seen whether more expensive new iPhone models will arrive in Korea at the end of next month and affect prices of other products such as those of Samsung Electronics and LG Electronics.

On September 13, Apple unveiled three new iPhone models -- the iPhone XS, XS Max and XR, and the Apple Watch 4 series at Apple's Steve Jobs Theater in Cupertino, California. Specifications and design were very similar to those in rumors about them and their prices were higher.

The trio came out with two kinds of displays. The XS and the XS Max were loaded with super retina displays which were organic light emitting diode (OLED) displays, while the entry-level XR featured a liquid crystal display (LCD) display. Sizes are 5.8 inches for the XS, 6.1 inches for the XR, and 6.5 inches for the XS Max. This marked the first time that Apple released a 6.5-inch screen iPhone. In particular, “Plus,” the name for larger iPhone models was dropped and “Max” took the place, which drew much attention.

The new iPhone models were priced higher than those of last year. The iPhone XS and the iPhone XS Max (based on the 64GB model) will retail at US$999 and US$1,099 respectively. Even if a consumer buys the same model, the price will vary depending on storage spaces as there are three storage spaces –- 64GB, 256GB and 512GB. The highest model among the iPhone XS series is the iPhone XS Max 512GB priced at US$1,499. The model became the most expensive iPhone ever.

"The iPhone has become bigger and faster, but more expensive," the New York Times said. "Display prices which account for 35% of the iPhone manufacturing cost have fallen, so new iPhone models are expected to drop in prices but Apple did not lower them," said Kim Rok-ho, a researcher of Hana Financial Investment.

It is also expected that premium smartphone prices will soar again as Apple continues to maintain its high price policy. The iPhone XS Max 512GB is expected to exceed 2 million won (US$1,800) considering an exchange rate used by Apple. Some experts say that new iPhone prices may affect the price of other smartphone including LG Electronics’ premium phone LG V40 ThinQ set to come out next month and Samsung Electronics' next Galaxy S10 to be released next year. "It is natural that smartphone competitors' pricing policies will affect the smartphone industry as a whole," an IT industry official said.