Apple Inc. (NASDAQ:AAPL) released the iPhone X this month, and with a price tag of $999, the company could be pricing itself out of the hands of many consumers. As telecomm providers move away from subsidizing phones and leaving consumers to pay for most (and in many cases all) of the purchase price, at such a big price tag it’s sure to leave many customers in the sidelines. Apple will benefit from a higher price per phone, but if volumes decline too far then the result could be a decline in total dollars.
The company undoubtedly has its devoted followers that are always itching to buy the latest and greatest products, but the more these prices get out of hand, the less it will be possible for them to purchase Apple’s latest technology. Perhaps the company is okay with taking that gamble, but ultimately this could have wide-ranging consequences.
If people see Apple products as being too expensive and consumers opt to purchase an Android or another type of phone, then this will ultimately lead to less users of Apple’s iOS software. If less users use iOS then that could impact the demand for Apple-related products and services. This is a far-reaching conclusion but it’s not an inconceivable one.
Certainly there will be diehards that will refuse to abandon the newest iPhone, but as interest rates rise and other expenses start taking priority, having the newest iPhone may no longer be someone’s top priority. Saving hundreds of dollars on an Android phone with similar functionality could definitely entice some consumers to make the switch.
