Why talk of a $1000 iPhone is overblown

Jan Dawson, Tech.pinions:

There’s been a lot of talk about Apple releasing a $1,000 iPhone next week, and a lot of pushback from financial analysts in particular on the idea that people would actually buy such a thing.


In the US, the vast majority of premium smartphones are sold through the major wireless carriers, with the largest four being AT&T, Sprint, T-Mobile, and Verizon Wireless. Each of those companies has been through a transition over the past few years away from the traditional subsidy model, under which customers paid a portion of the price of a phone up front, to a combination of installment and leasing models, where the cost of the phone is broken up into monthly payments.


Compare that to current monthly prices for the base model iPhone 7 Plus, a phone that costs roughly $200 less to buy outright, which run from $25 to $36, and you’ll see that the real difference in price between a $770 phone and a $1000 phone isn’t $230 for most customers but a monthly price difference of anything from zero to $15.

Most interesting to me:

On top of that, bear in mind that the new iPhones are likely to be the biggest carrier switching event the US market has seen since 2014, so we’re going to see a lot of discounts, offers, and other promotions which lower the effective price even further.

A massive carrier switching event. Subtle point, big business. Keep that in mind as you explore your iPhone options next week.