Two months ago, Fast Company reported that iPhone 8 would start at above $1,000 due to costlier components and advanced technologies, such as wireless charging, VR capabilities, revamped industrial design, a curved AMOLED screen and more. UBS analyst Steven Milunovich begs to differ, telling CNBC that the device will come in for less than $1,000 as new models are expected to see a “bulge of buying”.

He predicted a sale price of iPhone 8 would be between $850 and $900.

“We think an $870 price would be accretive to earnings per share but dilutive to gross margin, a dynamic Apple has said it would accept,” UBS noted. Samsung’s new Galaxy S8 is priced at $720 and its larger-screened Galaxy S8+ counterpart costs $840.

Apple rarely ventures above competitors’ price in the high end, UBS underscored. Although iPhone 8 will be at a display size disadvantage to Galaxy S8+, they’re convinced Apple will price it relative to Samsung’s top model.

Here’s an excerpt from Milunovich’s research note:

Offsetting this display size differential is the fact that iPhone 8 could have features not included in Galaxy S8+, such as a front facing 3D sensing camera, embedded fingerprint sensor and higher quality facial recognition.

UBS is “cautious” on how much higher Apple could go on price given a smaller display.

“Apple customers seem fine with paying more for products they feel are differentiated,” he added. Case in point: iPhone 7 Plus, which “has had more demand than any other Plus model released” thanks to the dual camera.

The investment bank pegged bill of materials for a 64-gigabye edition of iPhone 8 to be $70 to $90 higher than that of today’s flagship iPhone 7 Plus model. The higher cost will hurt Apple’s gross margin which UBS said is likely to decline to 38.5 percent in the fiscal 2018 year from its estimate of 38.7 percent for the current fiscal year.

iPhone 8 could account for 45 percent of shipments in fiscal 2018, UBS said.

Based on a higher-priced iPhone 8 and a boosted upgrade cycle, the investment bank predicted that iPhone’s average selling price is likely to be $692, up from a prior estimate of $667. UBS now expects the company’s earnings per share for fiscal 2018 to be $10.55, up from its previous estimate of $10.25.

Assuming iPhone 8’s hardware is impressive, will you be willing to pay the higher price?

Image: conceptual rendering of a bezel-less iPhone 8 with wraparound AMOLED screen and Dark Mode, courtesy of user interface designer Vianney le Masne

Source: CNBC

  • David Gow

    In answer to your last paragraph. Yes

  • p1noyako

    I buy what I like so my answer is YES.

  • tariq

    I know Apple will never get SD card slot but if they do, I’m switching asap regardless of the price

    • Ara Rezaee

      If you don’t care about the price then get the 256GB version, no need for sd cards. Ever.

    • ravinigga

      U know sd card is not so fast like the internet storage of the iPhone

      • Mike

        That’s why they keep your apps on internal storage to keep them running fast while everything else like images, videos, music, document, and other stuff go on to the sd card.

      • tariq

        U can get better sd cards that work faster now, i use one on my Samsung. But i understand it’s still not as quick as internal storage

      • ravinigga

        I know but for I don’t mind pay extra 100(should maybe 50). I can always sell it later get most of my money back.

    • BlackPantherK

      It would be nice to have dual sim on an iPhone for business users or others with 2 sims/phones atm.

  • triggerhappypunk

    count me in!

  • Steve Jobs

    If it starts at $750 for the 128GB I’m good

    • Agneev

      You’d get it for free!

  • jaysoncopes

    Wait, can we take a moment to appreciate that apparently that is “Dark Mode” according to Vianney le Masne? That’s the freaking brightest dark mode I’ve ever seen.

  • ravinigga

    Well if it’s normal priced they get more money. I think a lot of user waited for oled or iPhone