Apple expected to unveil bigger, costlier iPhone today: Predictive analysis of India pricing

Apple is set to launch its 2018 iPhone lineup at Steve Jobs Theater in Cupertino, California today. The ‘Gather Round’ event is one of the most significant in recent years as Apple is expected to put an end to the four-year old design first seen with the launch of iPhone 6 in 2014.

At the event, Apple is widely anticipated to introduce three new iPhone models like it did last year. The new iPhones are said to be modeled around the design language first seen with last year’s iPhone X. In turn, it means that Apple will do away with Touch ID and use of fingerprint sensors for biometric authentication altogether this year. This is a giant step as Android OEMs scramble to copy Face ID, and implement in-display fingerprint sensor technology. In the past, Apple has set the trend for the entire mobile industry, and this year doesn’t seem to be any different.

Apple iPhone 2018 Price

According to leaks and investor report from former KGI Securities analyst Ming-Chi Kuo, the new iPhones will start at $699 in the US. The report predicts that 6.1-inch LCD iPhone will start at $699 in the US for the base model and the price will increase depending on memory. This model is now seen as the replacement to the iPhone 8, which also started at the same price in India.

Apple iPhone Xs with 5.8-inch display and 6.5-inch iPhone Xs Max are rumored to start at $799 and $999 respectively. At that retail price, the iPhone Xs will essentially replace the iPhone 8 Plus while iPhone Xs Max will act as successor to iPhone X in price segment alone. The pricing suggests that iPhone Xs will be much cheaper than iPhone X last year. While these leaked pricing in the US does not suggest any major changes, the story could be completely different in India. Last year, Apple had a change of heart last year and launched the new iPhone models almost immediately after the India availability.

Predicting the India price of new iPhone

Historically, Apple is not known for parity between pricing of its device in the US and other markets. During the second fiscal quarter earnings in August, Apple said that company continues to target margin between 38 and 38.5 percent. The two critical factors that influence India iPhone pricing would be: 1. Apple’s strategy for the Indian market and 2. Dollar vs Rupee exchange rate.

Strategy and appetite for growth is understandable. Currently, popular attention in India is on the value of the rupee to the dollar. Besides, India doesn’t work with a carrier model like the US where consumers could pay a fixed monthly bill over a period of 12 or 24 months instead of a heavy bill upfront to buy a new flagship. With that context in mind and price of iPhone in the past few years, it seems the new iPhones will be much more expensive than existing models.

We asked you for your thoughts via Twitter. In response to a BGR India poll, around 39 percent voters said that the new iPhone Xs will more expensive than the iPhone X. Around 33 percent participants seemed hopeful that Apple will make iPhones cheaper in the country while 28 percent think that the price will be same as predecessor.

When Apple launched the iPhone 6 in 2014, a dollar was valued at Rs 61. Four years later, the dollar is currently equivalent to more than Rs 72. The drastic change in the price of dollar versus rupee should definitely affect the India pricing of newer models.

Apple iPhone dollar pricing over the years

To add some context, Apple had priced the iPhone 8 at Rs 64,000, iPhone 8 Plus at Rs 72,000 and iPhone X at Rs 89,000 at the time of launch in India last year. The pricing were based on then import duty of 15 percent on fully built iPhone models and dollar was trading at Rs 65. Now, ahead of today’s announcement, we must keep in mind that the government has increased import duty on fully built products to 20 percent and dollar is trading at Rs 72 for a rupee. This definitely mandates an increase in pricing of iPhone in India, if Apple wants to maintain its margins.

Plotting the course of iPhone’s dollar and Indian pricing over the course of the 5-year period starting 2014 with the iPhone 6, Apple is likely to announce its most expensive iPhone models yet in India. The iPhone Xc, the cheaper model with 6.1-inch LCD display, could be priced at Rs 76,000, an increment of Rs 12,000 from the launch price of iPhone 8.

The variation in Indian pricing of iPhone over years

The iPhone Xs and iPhone Xs Max could be priced around Rs 85,500 and Rs 1,05,000 in India. We’re arrived at this figure by incorporating a 10 percent incremental margin to the cost of last year’s iPhone. For instance, at the time of the launch of iPhone 6 and 6 Plus, the dollar was trading at Rs 61. During the launch of iPhone 6s and iPhone 6s Plus, the dollar was trading at Rs 66, an increase of Rs 5 over just one year. In India, the iPhone 6s and iPhone 6s Plus were expensive by Rs 8,500 and Rs 9,500, respectively. We are expecting Apple to add 10 percent margin to compensate the depreciating rupee and increased import duty.

However, as we mentioned earlier, since the pricing is influenced by two key factors. If Apple decides to go big and aggressive in India, we could see the company taking an initial hit in price. But going by trends and statistical data, we have all the reasons to expect a pricier iPhone in India. We’d know for sure once the devices are launched.

What to expect

All the rumors leading up to today’s event indicate the Cupertino-based iPhone maker will introduce at least three new iPhone models at the event today. These three new models won’t represent a dramatic shift in terms of design but will represent a new design across the board for the first time. According to rumor in the run-up to the Apple event, we expect to see a 5.8-inch, 6.1-inch, and a 6.5-inch iPhone.

The 6.1-inch model is expected to be cheaper of the three models and could be named the iPhone 9, iPhone Xc or the iPhone Xr. The names of these devices are not certain but the names do not really matter. This cheaper model is expected to act as the successor to iPhone 8 and might use LCD display, aluminum frame and single rear camera in order to cut cost. It is also rumored to come in a variety of colors including blue and orange.

The two other models with 5.8-inch and 6.5-inch displays, are said to be named iPhone Xs and iPhone Xs Max. The iPhone Xs will be an iterative update to last year’s iPhone X and is expected to feature same design with OLED display, stainless steel frame but offer more memory and faster processor. Apple is believed to introduce a gold variant as an addition to black and white variants this year.

The iPhone Xs Max, as the name implies, will stand for maximum display from an Apple mobile display. It is expected to pack a larger 6.5-inch Samsung-made OLED display along with iPhone X-style design and updated processor. All the three models are confirmed to support Face ID and include wireless charging capabilities.

(This article was first published in BGR)