Analysts: The iPhone 8 is 'unlikely' to cost $1,200 (AAPL)

iPhone 8

The next iPhone — expected to be named the iPhone 8, the iPhone X, or the iPhone Edition — is "unlikely" to cost the $1,200 (£925) that numerous media outlets reported, according to analysts at UBS.

Instead, they believe that it is more likely to start at around $900 (£694) for a 64GB model, increasing to $1,000 (£771) for a 256GB model.

It's unclear if there will be two or three storage options, but UBS thinks there will be two.

In a note to investors, UBS analyst Steven Milunovich and UBS associate analyst Benjamim Wilson said they "questioned the logic" of a $1,200 flagship iPhone, which is expected to come with no physical home button, a new almost edge-to-edge OLED screen, and facial unlocking technology.

They pointed out that Apple usually prices its flagship Plus models at a slight discount to Samsung's premium Galaxy Note devices. The latest Note 8 device, which was made available for preorder at the end of August, costs $929.99 (£717).

"Apple tends not to price far from the high end competition," the analysts wrote. "With the Galaxy Plus at $840 and the Note at [almost] $950, we think a $900 price tag for the base OLED model makes sense."

They added: "There seems to be a belief that Apple has to charge over $1,000 for the phone. We challenge this premise. The arguments we've heard for a $1,200 phone are, 'to manage supply constraints' and 'because the phone costs more.' Both are inconsistent with how Apple thinks about pricing.

"We don't think Apple thinks 'How much can we charge?' Rather it chooses a price band worth playing in and then develops a product to fill that space. For example, Apple decided the $900-1,000 notebook market was worth entering. It then asked 'What does our $900 MacBook look like?' Enter the MacBook Air. If Apple cannot deliver an experience worthy of the brand at a given price band and profitability level, it does not proceed."

In addition to the next-generation iPhone, Apple is expected to announce two new iPhone 7 models: the iPhone 7S and the iPhone 7S Plus. They're expected to be cheaper than the iPhone 8 but they won't have the same radical redesign.

On August 31, Apple sent out invitations for an event at its new headquarters in California on September 12. At the event, Apple is expected to announce the new iPhones alongside a new version of the Apple Watch, a new version of Apple TV that has 4K resolution, and new iOS 11 software for iPhone and iPads.

Pricing for all of the new iPhones outside the US is even less clear but the new iPhone 8 could be over £1,000 in the UK based on how much some of Apple's other new products currently retail at.

Apple does not comment on rumours and speculation.

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