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The iPhone 8 could cost $1000, but most people won't pay that much up front – Markets Insider

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iPhone 8 iPhone 10 iPhone X Concept
A mock-up of the
soon-to-be announced new high-end iPhone.


YouTube/ConceptsiPhone


The new top-of-the-line iPhone may cost $1,000 or more, but don’t
worry about having to come up with that much money all at once.

Thanks to the wireless carriers’ installment plans, you’ll likely
be able to pay that amount over the course of a couple years or
more, at a cost of less than $50 a month. 

With Apple slated to unveil its latest batch of iPhones next
week, the biggest concern about them has been how much the new
high-end model, which has been variously referred to as the
“iPhone 8” and the “iPhone X,” will cost. Some analysts have
suggested it will be much more expensive than current
models, potentially with a price tag of as much as $1,000. On its
face, that price would seemingly dissuade many consumers
from purchasing the phone.  

But most Americans don’t pay the full price of a phone
up-front, regardless of how much it costs. Instead, most
Americans purchase the iPhone and other smartphones over time via
their wireless phone bills. Rather than forking out $1,000
for the new iPhone when they get it, many Americans will choose
to simply have a higher monthly bill that includes a portion of
the cost of the phone — potentially making the device much
more affordable.

For example, the iPhone 7 Plus, which has a full price of $770,
costs between $25 to $36 per month on most plans.

But how much would the carriers charge for a $1,000 iPhone
8 on a monthly payment plan? Jackdaw Research
analyst Jan Dawson
used 
the
recently released $950 Samsung Note 8 as a guide

“The recent Samsung Note8 launch gives us something of a
sneak peak at how a $900-$1,000 phone actually gets priced and
sold in the US market. Here’s a sampling of prices from the major
US carriers:

  • “AT&T: full retail price: $949; monthly price: $31.67
    for a 30-month installment plan with option to trade in after 2
    years; $39.59 to trade in after one year
  • “Sprint: full retail price: $960; monthly price: normally
    $40 but currently $20 as part of a special offer, for a lease
    with option to trade in after a year
  • “T-Mobile: full retail price: $930; monthly price: $210 up
    front and $30 per month over a 24-month term, with an offer to
    buy one and get one free during preorders
  • “Verizon Wireless: full retail price: $960; monthly price:
    $40 for two years.”

Dawson added: “You’ll see that the real difference in price
between a $770 phone and a $1,000 phone isn’t $230 for most
customers but a monthly price difference of anything from zero to
$15.”

Will the carriers offer iPhone 8 deals?

But there are other factors that could affect the price consumers
pay for the new iPhone. Carriers often compete with each
other by offering attractive trade-in offers, discounted monthly
payment plans, and buy-one-get-one offers on new, high-profile
devices, like the iPhone 8. Carriers figure that when consumers
buy a new iPhone, they might also be open to switching wireless
providers, so it’s a good time to offer deals. 

Indeed, some
analysts have predicted
 that carriers are gearing up to
offer “assertive promotions” to coincide with the new iPhone’s
launch.  

But not everyone agrees. The big carriers might not strongly
discount the new iPhone, BTIG analyst Walter Piecyk wrote in
research note on Thursday. The carriers are in pretty
good shape, so they don’t need to boost their subscriber numbers
by using discounts to lure customers from their rivals.
Churn rates — which measures the pace of customer defections
— are low, while profits are high.

And the carriers haven’t felt pressure to respond when one of
their rivals offers a big new discount, Piecyk said. When Sprint
launched a promotion earlier this year that offered a free year
of service, it only signed up 13,000 new customers, even
though its big rivals didn’t match or respond to the deal,
he noted. 

“It might be tough for wireless operators to top the generous
iPhone offers from last year,” he wrote. “The competition among
US operators is simply not as fierce as many of our peers seem to
believe, but phone upgrades of existing customers could still
play a role in delivering growth in smartphone sales.”

So instead of giving a discount on the iPhone 8, or whatever it
ends up being called, carriers could offer other, potentially
less costly promotions, like T-Mobile’s recent move to bundle
free Netflix with family plans. Barclays analysts recently
suggested that Apple could bundle a free year of Apple Music or
iCloud storage with the iPhone 8.

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