The New iPhone X: Yes, It Could Really Cost $1,000

A new iPhone is almost here. The price tag? $1,000. Yes, you read that correctly.

The Cupertino, California-based tech giant held a special event Tuesday at its new Steve Jobs Theater to unveil its latest iPhones, including the iPhone X, as well as other innovations for the Apple Watch and Apple TV.

But it was the news about the latest iPhone models that created the most excitement.

“No other device has had the impact on the world that the iPhone has,” Tim Cook, Apple’s chief executive officer, said in prepared remarks during the streamed event. “Nothing else has put so much power into so many people’s hands.”

The 10-year-old iPhone is perhaps the most successful consumer device in recent history, and the latest model could push Apple’s market cap to a staggering $1 trillion or more, according to reports.

In addition to the iPhone X, which will begin shipping in November, Apple will release the Phone 8 and 8 plus, scheduled for release by the third week of September. These will have features including wireless charging and faster internal processors. The iPhone 8 will start at $699. The 8 plus will retail for $799.

So what’s inside the iPhone X?

The iPhone X is the first major redesign of the iPhone since 2014.

The handset’s feature list will include facial recognition technology, an edge to edge display, augmented reality camera, improved battery life, and animated emojis.  It will also eliminate the home button in favor of a touch screen that pairs with facial recognition to activate the phone.

Will the iPhone X be too pricey for consumers?

The high price is a definitely a gamble with consumers, numerous industry experts say, particularly as the cost of an iPhone has been edging up for years. In fact, the 7 plus, released in 2016, retails for $769.

Only 11% of consumers said they’d purchase a phone with a price tag of $1,000, according to a survey conducted by investment bank Barclays in August. (The majority of those polled said they don’t want to spend more than $560.)

Nevertheless, Apple’s not alone in pushing up prices for its handsets.

Competitor Samsung’s new Galaxy 8, which will be available September 15, retails for $950. Together, Apple and Samsung control more than a third of the global high-end smartphone market. 

And for many consumers, smartphones have become a fact of life. They now reportedly spend about 4 hours a day on their mobile devices, which are doing double time as work tools for increasing numbers of people.

And if the price is a gamble, it’s clearly one Apple has thought carefully about.

One reason is that consumers plan to spend more cash on mobile phones in the coming years, according to the research firm Gartner. Another reason why: In the months following the release of its new phones, stock price tends to tick up dramatically. In fact, Apple’s share price in the year following the release of its iPhone 7 increased 43%.

Sources: FactSet and the Wall Street Journal

Top takeaways:

  • Apple announced a slew of new products on Tuesday, including new iPhone models: The iPhone, 8, the 8 Plus and the new iPhone X.
  • The Apple iPhone X–incorporating the handset’s first major redesign in years–comes packed with new features like facial recognition technology, animated emojis and wireless charging.
  • It’s unclear if the new features are enough to justify the hefty $1,000 price tag.
  • Apple appears to be betting with the odds that it is.





Author:
Jeremy Quittner is the financial writer for Stash.



Disclaimers
This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.