Later this year, Apple (AAPL +0.16%) is expected to release an updated version of the current iPhone X as well as a larger version of that updated iPhone X. While there have been substantial leaks about the specifications of these next-generation devices, there hasn't been much information concerning how Apple plans to price them.
Let's assume that Apple intends to offer the upgraded iPhone X for the same price that the current iPhone X sells for -- $999 for the baseline configuration and $1,149 for the one with more storage. How, then, might Apple price the larger iPhone X Plus?
Image source: Apple.
I see two possibilities.
Option No. 1: $100 premium
Apple could follow the same pricing strategy that it currently does with the standard iPhone and its iPhone Plus counterpart -- charge a $100 premium. This would translate into $1,099 for the baseline iPhone X Plus and $1,249 for the higher-end storage option.
If the iPhone X Plus truly is just a larger version of the upcoming iPhone X with otherwise identical specifications and features, then a $100 premium is probably reasonable. Remember that the current iPhone 8 Plus, which comes at a $100 premium to the iPhone 8, actually has significant specification upgrades compared to the iPhone 8 including a sharper display, more memory, and a dual-lens camera system.
My guess is that a $100 premium for the iPhone X Plus over the iPhone X is the most likely pricing scenario.
Option No. 2: Following the iPad Pro playbook
Another distinct possibility is that Apple will want to follow the iPad Pro playbook. Apple currently offers its highest end iPad Pro tablets in two screen sizes -- 10.5-inches and 12.9-inches. The baseline 10.5-inch iPad Pro sells for $649 and its larger sibling starts at $799 -- a $150 premium.
The iPad Pro 10.5-inch and 12.9-inch share identical internal specifications, differing only in screen size, and yet Apple charges a $150 premium for the 12.9-inch model over the 10.5-inch model. It wouldn't surprise me, then, to see Apple carry this pricing strategy over to the new iPhone models, especially since Apple appears to be reshaping its iPhone segmentation strategy to mirror the iPad's.
Nevertheless, I think a $150 premium for the iPhone X Plus over the iPhone X is less likely than a $100 price increase simply because a larger premium could unduly crimp demand for the larger model. Remember that the iPhone X isn't selling as well as Apple had hoped -- something that's been largely attributed to the high price of the device -- so if Apple wants the iPhone X Plus to sell in high volumes, it needs to be careful not to go too crazy on the pricing.
If Apple plans to do something interesting like offer the next-generation iPhone X at $899, or even $849, for the baseline model, then a $150 premium for the iPhone X Plus would price it around where the current iPhone X is. In that case, the premium would likely be justifiable since Apple would be delivering much more value in the form of a larger device for roughly the same price as the current iPhone X.
