It has been widely reported that Apple (NASDAQ:AAPL) is planning to launch not two new iPhone models this year, but three. The first two are expected to be upgrades to the current iPhone 7 and iPhone 7 Plus, with internal enhancements, glass backs, and potentially even upgraded liquid crystal displays in familiar form factors.
The third is expected to be an all-new design with a full-face organic light-emitting diode (OLED) display, 3D sensing capability, and potentially much more.
There has been much speculation as to how much the premium iPhone is going to cost, but thanks to a new report in the The New York Times, that speculation may finally be put to rest.
It's not that bad
Per the publication, the OLED iPhone will be "priced at around $999," citing "people briefed on the product."
Now, that price will probably apply to the entry-level storage configuration, which is expected to come with 64 gigabytes (GB). Apple generally offers a base storage tier as well as pricier models with more storage.
Given the rumored feature set that'll be coming to this phone, this isn't bad at all. Today's 32 GB iPhone 7 Plus sells for $769, and the top-end version with 256 GB of storage sells for $969.
Given the choice between a 64 GB OLED iPhone for $999 or a 256 GB LCD iPhone for $969, I think that the feature set, ergonomics, and aesthetics of the OLED iPhone will overwhelmingly drive customers to choose it over the LCD model.
Expect higher-priced models, too
Apple is rumored to be planning to offer the OLED iPhone in three storage configurations: 64 GB, 256 GB, and 512 GB.
If that rumor turns out to be true, then I would expect Apple to sell the 256 GB model for $1,149, and then the 512 GB model for around $1,300.
I know that for the current iPhone models, Apple charges just a $100 premium to move up each storage tier, but given the current tight supply of 3D NAND flash industrywide, coupled with the fact that in moving up each tier Apple will be giving customers an additional 192 GB and 256 GB of storage (up from 96GB and 128GB, respectively), I think Apple will charge more for additional storage this year.
Good for Apple's average selling prices
If the OLED iPhone starts at $999 and Apple sees a large portion of its iPhone sales mix shift toward that phone, then Apple should enjoy a rather large boost in iPhone average selling prices during the coming product cycle.
Significant average selling price growth, coupled with what is likely to be non-trivial unit growth (as Apple taps into the pent-up demand for iPhones with a newer, sleeker design) should drive some nice iPhone revenue growth for Apple in the coming year.