iOS

Carriers expected to produce massive iPhone 8 discounts to compensate for its price tag

Lately in iPhone release cycles, we’ve seen carriers run deal sweeteners like a BOGO offer or a memory upgrade some time after first sales and up through the middle of the following calendar year.

With the iPhone 8 expected to not only mark a significant trigger for many latent iPhone owners looking for a reason to finally upgrade, but exceed the $1,000 mark for the first time, analysts are now hoping — perhaps begging — for Apple to relinquish its strict price leash and heavily subsidize the phone through carriers.

Specifically, a note from Nomura-Instinet analyst Jeffrey Kvaal that’s been passed along by Business Insider mentions some “assertive promotions” to be had in the US wireless market.

US telcos indicate record-low upgrade rates have not eased further ahead of the iPhone 8. Modest feature enhancements post-iPhone 6 drove plateauing volumes […] We believe that Apple has plenty of innovation to add to future cycles, such as AR, machine learning, voice integration, 3D sensing, and optical zoom.

From our analysis (because what, Pocketnow can’t make observations and predictions?), we believe that the carriers with higher average revenue per user figures — AT&T and Verizon — will be able to offer supplementary products such as a “get one free” iPhone (not necessarily another iPhone 8) or perhaps some AirPods or maybe even a HomePod. These carriers are able to offer total financing of the price of big ticket items like a Galaxy S8+ or a new LTE model iPad Pro over a 24-month equipment installment plan as they’re backed by sheer revenue and user base.

We also predict that lower ARPU players with fewer subscribers such as Sprint and T-Mobile may be able to get direct subsidies on the pricing of the iPhone 8 models to avoid overbearing down payment amounts — these carriers have less of a capacity to finance, usually being able to cover only between $800 and $900.

Of course, it’s up to Apple whether it thinks it should try for volume or stick to its core principles on beefy margins.

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.