Qualcomm Gobi 5 Chipset For the iPhone 5 & iPad 3The iPhone 5 wish list, which includes a bigger screen, 4G LTE, and a bolder processor, may all contribute to a heftier price tag. But mobile electronics customers seem willing to accept a price hike from Apple products, so long as they deliver on new features.
Because of the sustained excitement over the eventual iPhone 5 release, few consumers have contemplated whether or not the 2012 iPhone will usher in a price hike — nor do they seem to care all that much. It would seem that iPhone 5 hysteria has led to a money is no object mentality — people will do what it takes to ensure that they own it once it is released.
But a new article today from Phones Review argues that all of the new iPhone features that users are clamoring for in the iPhone 5 may very well lead to an increase in price that might take it out of the price range for struggling consumers who have less disposable income today than they did back when they bought their iPhone 3GS or iPhone 4. Mark Chubb, a favorite of ours over at Phones Review, explains that “Apple has been making a concerted effort to rid itself of its reputation for high-priced products, as seen with the efforts to keep pricing the same for the iPhone and as we’ve also seen with iPad pricing. However there has to be a limit to being able to do this and when looking at the specs that are anticipated for the iPhone 5 it makes us wonder if it would even be possible to keep pricing the same this time around.” He goes on to cite the laundry list of rumors specs for the iPhone 5, including a larger display, 4G LTE, the A6 processor, and perhaps a new camera sensor.
By keeping the same form factor with the iPhone 4S and virtually the same form factor with the iPad 2, Apple undoubtedly has been able to control production costs for both devices. In this way, Chubb argues that Apple has managed to diminish the sense that they only make premium-priced electronics, all while continuing to sell products with a high profit margin, reminding us that “although the contract-free prices are now slightly more than for the iPhone 4, the prices for the iPhone 4S on contract remained the same as for the iPhone 4.”
But does Apple really need to worry about the price of the iPhone 5?
If a recent study showing that future iPad 3 users don’t care price are true, then it would not seem so. Even current Kindle users, many of which most likely bought into Kindle because of its low price point, are overwhelmingly ready to onboard to the iPad 3 when it is released. These are all realities for the iPad 3, which doesn’t garner nearly as much buzz and excitement in the mainstream as the iPhone 5.
Finally, because analysts believe that the lion’s share of iPhone 5 and iPad 3 sales will be driven by users’ desire for 4G LTE on Apple devices, the thirst for LTE would seem to be strong than any concerns for spending a few extra bucks to get it. The bottom line is simple: as long as the iPhone 5 delivers on major changes in form factor and specs, consumers will be ready to foot the bill. And they will do so happily, no doubt.
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