When the original iPhone debuted in 2007, it was available at an unsubsidized cost of $499 and $599 for the 4GB and 8GB models, respectively. With the introduction of the iPhone 3G, the price fell substantially so that one could be had for $199. As the 3GS, 4 and 4S were released, the prices continued to stay in the $199-$399 range depending on the capacity of the device. As more details of the iPhone 5 specs are leaked and anticipation begins to mount, it’s natural to wonder what price point Apple will release it at.
As the predecessor to the new iPhone, the pricing structure of the 4S might be the best model to go off of. Currently, the iPhone 4S can be purchased at a price point that starts at $199 for the 16GB model. This goes up to $299 for the 32GB model and $399 for the 64GB model. The off-contract prices are substantially higher, but these are the prices that most consumers will purchase since most iPhones are bought on-contract. It seems like $199 is the sweet spot for iPhone pricing, and expecting Apple to maintain that status quo with the release of the new iPhone is logical.
One factor to keep in mind that might throw off this pricing structure is the capacity of the new iPhone. While the iPhone 4 started at 8GB and moved up to 32GB, the iPhone 4S started at 16GB and goes up to 64GB. If Apple changes the available capacities to start higher than 16GB or end higher than 64GB, this might impact the pricing structure. The new iPhone could then potentially start at $199 for a 32GB model if Apple eliminates the 16GB iPhone this year.
Cheap Android competitors could also influence the price of the new iPhone. While the iPhone is an iconic device, statistics show that Apple has steadily been losing ground to Android over the last two years. This was especially true in 2011, as Android sales outpaced iPhone sales more rapidly than ever. There is a larger number of quality devices available for $99, and this might push Apple to finally compete in the price area. If this has influenced Apple, the new iPhone might debut with a 16GB model at $99 or $149 in order to hold off the competition.
The final thing to keep in mind about the price of the iPhone 5 is carrier pricing. While the iPhone 4S is currently the same price on all carriers, Sprint is also desperate for growth. When the new iPhone releases, carriers might try to compete on price. This may not come in the form of discounts on the iPhone, but may happen in the form of carrier rebates or free accessories to persuade customers to switch providers.
A pricing structure closely mirroring that of the 4S seems the most likely. $199 has been a successful price point for the last few years, and it makes sense that Apple would stick to what works. No one will know until the iPhone 5 is revealed, though. Apple just might surprise everyone.
