Apple is negotiating with the wireless carriers over pricing for iPhone 6, seeking an increase by $100, claims Jefferies in a report.
Jefferies analyst Peter Misek said in a research note that the price hike would ease worries over Apple’s profit margins for the new device.
According to Misek, Apple has discussed the idea of increasing the price with wireless carriers and the initial response has not been positive.
“The possibility may at first seem far-fetched in light of investor concerns regarding possible carrier subsidy and handset price cuts due to smartphone saturation and lack of differentiation,” Misek wrote.
“But we think this general lack of differentiation could be the reason why Apple may be able to get a price increase. Carriers realize that the iPhone 6 will likely be the only headline-worthy high-end phone launched this year and that they will lose subs if they do not offer it.”
Misek claimed that the increase will be covered in markets like the United States, where carriers typically subsidize the price of the phone through long-term contracts. The report also notes that “a $50 average selling price increase will assist in offsetting much of the negative iPhone 6 gross margin impact and remove a major bear argument (on Apple’s stock).”
If Misek’s reports are to be believed, Apple’s negotiations would see that the price of iPhone 6 raised to $749. However, Misek’s track record with Apple’s rumors has been spotty with some relatively bad calls regarding Apple HDTV.
Apple’s flagship device iPhone 6 is expected to ship later this year in two sizes of 4.7-inch and 5.5-inch. Recent rumors suggest the 4.7-inch version to be available first with the larger 5.5-inch version to follow at the end of this year.
Apart from the larger display, the iPhone 6 is also expected to feature a thinner design with a protruding camera. The next-generation phone will pack Apple’s new A8 processor, a Touch ID fingerprint sensor, 1GB of RAM and is expected to run iOS 8.
