six colors

by Jason Snell & Dan Moren

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Linked by Jason Snell

New York Times: The new iPhone will be “around $999”

Brian X. Chen at the New York Times:

Chief among the changes for the new iPhones: refreshed versions, including a premium model priced at around $999, according to people briefed on the product, who asked to remain anonymous because they were not authorized to speak publicly. Apple made room for a bigger screen on that model by reducing the size of the bezel — or the forehead and the chin — on the face of the device. Other new features include facial recognition for unlocking the device, along with the ability to charge it with magnetic induction, the people said.

Analyst Michael Gartenberg and I talked about the price of the new iPhone a few weeks ago on Download. What Gartenberg said: “We’re gonna see a base model at $999, and then we’re going to see the model that everyone wants, that’s going to come in at well over a thousand dollars.”

Using the same logic I used to correctly guess the price of the HomePod, I came up with the same figure. The base iPhone 7 model costs $649. The base iPhone 7 Plus costs $769. That’s a $120 spread, so an imaginary higher-tier phone would cost $889.

But if you guess $889 or $899 as the price of the new iPhone, you’ve missed one of the fundamental rules of guessing Apple pricing: Once you’ve figured out what you think the price should be, raise it. If the math (and your heart, if we’re being honest) points to an $899 price, the price is more likely to be $949 or $999. And $999 is a powerful price because, as silly as that one-dollar difference is, it means that the new iPhone doesn’t start at $1000.

Gartenberg speculated that this iPhone might start at 128GB of storage, in part to justify the higher price, but I’m not so sure. Regardless, as Gartenberg pointed out on the podcast, the most popular model will probably be the $1099 model with a higher storage capacity.