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Record orders for the Apple iPhone 6 could lead to a 5% to 10% price hike for competing phones

Posted: , by Alan F.

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Record orders for the Apple iPhone 6 could lead to a 5% to 10% price hike for competing phones
Apple has recently been rumored to have ordered a record 70 million to 80 million units of the Apple iPhone 6 for the initial run of the phone. Chinese media have responded by telling consumers to expect a 5% to 10% price hike on competitive models, in return. The reason for this has to do with the limited resources that contract manufacturers have. If they are forced to have more assembly lines working on the iPhone 6 as opposed to another company's phone, production of the latter device will drop. And for those who passed Economics 101, think back at what happens when demand stays the same and supply drops.

Those of you who said that prices rise under those circumstances, congratulations on being correct. Consider that Apple's largest iPhone manufacturer, Foxconn, also builds devices for companies like Nokia, Sony, Motorola, Microsoft and BlackBerry, to name a few. You can see why Apple's decision to order such a large amount of handsets could reduce the supply of other models.

The same quarter that launches the Apple iPhone 6 could also see the release of the Sony Xperia Z3, the BlackBerry Passport, and the Samsung Galaxy Alpha. It should be interesting to see if the rumored large order placed by Apple for the iPhone 6 pans out, and if it does, how that affects the pricing of the competitors' top-shelf phones.


Thanks for the tip!

source: udn.com (translated) via GforGames

58 Comments
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posted on 27 Jul 2014, 00:47 7

1. twens (Posts: 977; Member since: 25 Feb 2012)


Some of us don't care. We always wait a while for prices to drop before we make a purchase. Got a brand new iPhone 5s recently for half of the price and it's not bad. It's okay, jail broke it and enjoying it so far whiles I wait for note 4.

posted on 27 Jul 2014, 01:17 3

3. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)


Alan's analysis also presumes demand for competing phones to the iToy is stable. If the demand for iToy competitors is not stable (say for example, it drops), then no price increase.

The price points are pretty well-defined. There was a story about Apple trying to get the carriers to increase the pricing for the iP6, but the carriers weren't biting. Time will tell, though (on all fronts - demand and pricing).

posted on 27 Jul 2014, 04:22 4

13. Finalflash (Posts: 3075; Member since: 23 Jul 2013)


He is talking about the competitors having to raise their prices. Since Apple is kind of the big fish, they get first dibs on production. So others will feel it, not Apple.

posted on 27 Jul 2014, 09:10

25. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


FF, would you consider trying the 6 out?

posted on 27 Jul 2014, 09:55

30. rallyguy (Posts: 620; Member since: 13 Mar 2012)


What the author doesn't mention is Apple doesn't really make anything themselves besides the chip. Apple buys their camera and screens from Sony and Sharp.

Is Sony or Sharp going to sacrafice their own line of phones for Apple? Nope. I don't really see prices changing much in terms of non-Apple phones.

posted on 27 Jul 2014, 14:27

41. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)


They don't even make the chip. Sammy was making the chip. Now TSMC is making the chip. But Sammy is supposed to be making the chip for the iP6. Back-and-forth it goes. But Apple have never made the iToys. In fact, they are just getting around to bringing production for the Mac Pro back to the U.S.

posted on 28 Jul 2014, 09:49

53. michaelmicro (unregistered)


I believe Sony and Sharp's smartphone divisions have to compete for Sony and Sharp cameras and screens just the same way Apple do. So if the Sony and Sharp camera and screen divisions sells all it's supply to Apple, Sony and Sharp smartphone divisions would have to shop elsewhere for their cameras and screens.

posted on 28 Jul 2014, 11:04

54. JunitoNH (Posts: 1771; Member since: 15 Feb 2012)


It is called a contract. If they agreed to it, they must built it. Also, don't be naive, is all about money and business. If they make more money manufacturing Apple parts, guess what, they will sacrifice their lower end devices. e.g. Google makes more money from iOS than Android. Don't think for a moment Google cares more about Android, is all business.

http://gizmodo.com/5897457/google-makes-four-times-more-money-from-ios-than-android

http://www.businessinsider.com/apple-android-market-share-ecommerce-2014-1

posted on 27 Jul 2014, 14:29

42. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)


Others could quite likely feel the impact of lower production bandwidth. Whether that translates to increased sell price depends on where demand is at for the new non-Apple toys. If demand is soft, the prices likely won't go up.

posted on 27 Jul 2014, 05:19 5

15. sipha (Posts: 434; Member since: 12 May 2012)


This article made macro economics sound so simple.. The are just to many variables, & even if manufactures would be hit with a 10% rise in cost i dont think that would translate to consumers as well.. The manufactures would just would probably just absorb the cost in order to compete with the new iPhone!!

posted on 27 Jul 2014, 03:46 4

9. Leo_MC (Posts: 1467; Member since: 02 Dec 2011)


5s never dropped half of it's price so you must have gotten it from the 2nd market which means it's not new.

posted on 27 Jul 2014, 07:41

17. Cicero (Posts: 869; Member since: 22 Jan 2014)


I bough recently a ip5c (for my daughter) and I struggled a little bit to find it because of unavailability on the market. The price which I paid was half of the current price showing on Apple stores. It was 400 Eur.

posted on 27 Jul 2014, 12:51 1

38. givemetacos (Posts: 16; Member since: 12 May 2014)


Cause no one wants the 5c. Here in the US they had to give them away for free on contract and throw in a $50 gift card at retailers like best buy and walmart cause no one would buy them.

posted on 27 Jul 2014, 21:58

51. mrblah (Posts: 576; Member since: 22 Jan 2013)


troll

posted on 27 Jul 2014, 01:06 10

2. fzacek (Posts: 2486; Member since: 26 Jan 2014)


Why is Apple so much more important than the other manufacturers? I call BS...

posted on 27 Jul 2014, 01:18 10

4. appleDOESNT.com (banned) (Posts: 456; Member since: 19 Nov 2011)


iPoneArena loves to spread the iLove. Nothing to see here, nothin to see

posted on 27 Jul 2014, 08:26

20. InspectorGadget80 (unregistered)


iPhinearena is the same as ibgr.com I left ibgr too many u know what on that site. And people don't care if the GO broke or have Apple eat their wallets.

posted on 27 Jul 2014, 08:31

22. InspectorGadget80 (unregistered)


My fault I mean iPhone arena. And people don't care if they go broke.

posted on 27 Jul 2014, 08:35 4

23. Ninetysix (Posts: 2374; Member since: 08 Oct 2012)


It's their money. Let them buy whatever they choose. We will not care if you use your $$$ on gay bars. It's their hard earned money so they deserve whatever they desire.

posted on 27 Jul 2014, 09:12 2

26. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


Ouch town, population inspectorgadget80. +1

posted on 28 Jul 2014, 12:21

55. EclipseGSX (Posts: 1717; Member since: 18 Oct 2011)


So you are homophobic too? Makes sense..

posted on 27 Jul 2014, 07:56 2

19. Napalm_3nema (Posts: 2183; Member since: 14 Jun 2013)


The fact that you can't see this is pretty puzzling. Does any phone sell in numbers like the iPhone? No, not even close. Is the iPhone subject to carrier bloatware or carrier marking? No. Can you name another phone sold by carriers that does not get bloated or marked up by carriers? I'll give you a hint, the answer is zero.

posted on 27 Jul 2014, 10:01

31. rallyguy (Posts: 620; Member since: 13 Mar 2012)


Until now Apple has only sold one model phone. Of course people think it's good so they buy it.

Now Apple is making 2 models of phones. Gee, what's going to happen? Apple sales of the ip6 (4.7) will drop compared to the 5S because many will buy the 5.5 inch phone.

What are Apple lovers going to say when sales numbers go down?

posted on 27 Jul 2014, 12:49

37. pulkit1 (Posts: 354; Member since: 03 Jul 2014)


It doesn't matter to apple because as long as people are buying iPhones it is happy . What people say doesn't really matter .

posted on 27 Jul 2014, 12:56 2

40. stealthd (unregistered)


You make literally no sense. You think Apple wouldn't like that people are buying the 5.5" model over the 4.7"? You realize they're not losing a sale there right? They've had 2-3 models on sale at the same time for years now too btw.

posted on 29 Jul 2014, 08:02

56. Taters (banned) (Posts: 6474; Member since: 28 Jan 2013)


Apple uses all iPhones in their figures, which is smart. It creates an illusion of dominance. They did this for the 5c and 5s.

posted on 28 Jul 2014, 01:35

52. pokerc (Posts: 60; Member since: 24 May 2012)


Ummm yeah the nexus!!

posted on 27 Jul 2014, 12:53

39. givemetacos (Posts: 16; Member since: 12 May 2014)


Because they are over 50% of Verizon and AT&T smart phone customers.

iOS may not be as big as Android world wide, but they have a big chunk of marketshare in the US something like 40% of all smart phones.

posted on 27 Jul 2014, 15:17

45. dome888 (Posts: 73; Member since: 10 Oct 2012)


law of economies of scale.

posted on 27 Jul 2014, 01:21 2

5. appleDOESNT.com (banned) (Posts: 456; Member since: 19 Nov 2011)


oh, ya, I use iReferences because the world's most valuable company has actuyally no actual value... THiSi iS theIr fault!.. they name everything with Ai, so it hard for us to not iMock, iSorry, iReally am

posted on 27 Jul 2014, 09:15

27. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


An i. It's hard. IJS

posted on 29 Jul 2014, 09:38

58. pulkit1 (Posts: 354; Member since: 03 Jul 2014)


iReally don't care . You should be happy With what u have, ihappy with what have.

posted on 27 Jul 2014, 01:29 10

6. 0xFFFF (Posts: 3806; Member since: 16 Apr 2014)


Apple spreads this mythology through their backchannels, so consumers will think:

"oh, the iPhone 6 is not that much more expensive than other phones, because the prices are going to go up on all the other phones"

Needless to say, you've got to be a f***ing retard to believe this nonsense.

posted on 27 Jul 2014, 04:13 4

11. Trolloftheyear (banned) (Posts: 66; Member since: 16 Jul 2014)


Actually a great thing. This will force Android makers to bring even better phones. iUsers can buy how much mid ranges overpriced phones as they can. This will prevent Android makers from being lazy.

posted on 27 Jul 2014, 07:50 1

18. Philipand96 (Posts: 97; Member since: 12 Jul 2014)


The article reasoning does NOT make sense. I.e. drop everything and get and produce ALL of Apples order now.

Apple have always had a staggered release, and being iPhone initial demand has outstrip supply

Apple had to drop the price of the iPhone5C by reducing the internal storage by half to 8 GB

Apple is now trailing 2 increased phone sizes and hopes to keep loyal fans happy

Apple only release one flagship phone each year
Android is NOT a company but an Operating System.

People are buying these mid-range phones for a purpose and as mid-range phone they do NOT compete directly with iPhones on specs but in the end offer a less expensive alternative to the Flagship phones on offer

Foxconn I presume signed multiple contracts and none I would image gave precedent to Apple

Whilst some parts may be common to many handsets, attaching a sapphire screen to the iPhone6 will not be duplicated on say the Nokia assembly line

Every one assume that the market will follow Apple and increase prices
Xiaomi have shown that this is not the case

From the leaks that have so far emerged we know Apple iPhone base prices will be $850 AND $1012 for the 4.7" and 5.5" model
I could not help but notice the similarity in design of the 4.7” Amazon Fire phone (or should that be Amazon fre iPhone!) which is overly expensive IMO & on AT&T cost $660.00

The fire phone was marketed IMO for iPhone users, I doubt give that the 4.7iphone6 will have 13Mp camera or 32Gb internal memory or 2Gb ram,
Being a third cheaper than the iPhone 6 it may make sense to upgrade to this than to the IPhone 6

At a similar price mid $600 is the LG G3 which also a 13MP smart phone at 5.5 inches compete on size to the iPhone 5.5 again the saving is huge over a this 35%

It is NOT specification alone so in China Apple has been pushed into third place by Xiaomi

IPhones despite the premium feel etc. are NOT phones with premium specs. E.g. 20MP is top notch whilst Apple iPhone so far are 8Mp.

Whilst workers can be hired to produce more equipment cannot be switched to work solely on Apple to meet the increased order.

Finally there is such a thing as stock, we are NOT waiting for the components to be turned into a phone, many of the already released phone you can pick up WITHOUT waiting

posted on 27 Jul 2014, 10:03 1

32. rallyguy (Posts: 620; Member since: 13 Mar 2012)


Good point.

Funny how many people talk about evil companies but love Apple. If Apple raises the price of their phone, it's solely for profit. We all know if Apple sells the iP6 at Ip5 prices, they will NOT loose money.

posted on 27 Jul 2014, 01:38 5

7. promise7 (Posts: 877; Member since: 03 Jul 2013)


I highly doubt this. The manufacturer may increase prices for making the parts, but I think the companies selling the phones will bite the bullet and still sell the phone at the same price or even lower to combat the release of the iPhone 6.

posted on 27 Jul 2014, 08:29

21. InspectorGadget80 (unregistered)


199$ for flag ship phone, 299$ for A 5.8" phone. iPhone 6 299$, 399$ for their over price 5.5"

posted on 27 Jul 2014, 17:50

49. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


And you posted that to say what?

posted on 27 Jul 2014, 02:23 1

8. realjjj (Posts: 369; Member since: 28 Jan 2014)


ROFL
GforGames is always exceptionally moronic but you guys could try to think a bit before echoing what they publish.Or ,you know, you can at least get a proper translation.

Assebly costs are very low, you can search for a teardown by IHS or the likes and see their estimates.So anyone that procures it's own parts pays the ODM very little per phone and a price hike there has minimal impact. Plus they plan for available capacity ,they can build in advance and the market is huge, Apple doesn't have all that much share anymore. In Q3 and Q4 there will be some 700 mil smartphones shipped and Apple will be maybe 15% of that while that is also just an increase over the first half of the year of just 25 mil units.

posted on 27 Jul 2014, 03:51

10. Leo_MC (Posts: 1467; Member since: 02 Dec 2011)


When a phone costs 1-200 euro to manufacture, it can be sold with the same 5-600 euro price it have been selling before Apple's orders; the manufacturers can lower their profits just a little bit, if they want to.

posted on 27 Jul 2014, 04:18 1

12. Trolloftheyear (banned) (Posts: 66; Member since: 16 Jul 2014)


Finally the Android makers will copy Apple and start bringing large screen phones. They have no originality. Always copy Apple.

posted on 27 Jul 2014, 04:37 10

14. ciprian.ruse (Posts: 294; Member since: 13 May 2014)


I never participate to this kind of discussions but you mate have just got in the top of most idiotic posts on phonearena. Great job !

posted on 27 Jul 2014, 05:41 3

16. RuiBacelar (Posts: 153; Member since: 25 Feb 2014)


you failled in Trolling 101, sorry.

posted on 27 Jul 2014, 09:04 1

24. Trolloftheyear (banned) (Posts: 66; Member since: 16 Jul 2014)


Thanks.

posted on 27 Jul 2014, 10:41 3

34. g2a5b0e (Posts: 3724; Member since: 08 Jun 2012)


C'mon, dude. I'm surprised that you & at least nine other people couldn't see how obviously sarcastic he was being. I guess he lives up to his name.

posted on 27 Jul 2014, 09:29

28. GreekGeek (Posts: 1276; Member since: 22 Mar 2014)


I didn't know the whole smartphone market revolves around Apple now

posted on 27 Jul 2014, 09:53 1

29. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


I'm getting one, I know that. Hell with the price, it won't be that big of a jump.

posted on 27 Jul 2014, 11:34 1

36. aba71983 (Posts: 805; Member since: 24 Jul 2014)


Me too

posted on 27 Jul 2014, 14:34

43. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)


Magic 8-Ball says you will be getting a Note 4 before the iP6XL.

posted on 27 Jul 2014, 17:48

47. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


Welp, we'll see.

posted on 27 Jul 2014, 10:29

33. needa (Posts: 205; Member since: 30 Jun 2014)


most of the production for the competittors has already been completed.

posted on 27 Jul 2014, 11:25 1

35. Slammer (Posts: 1515; Member since: 03 Jun 2010)


If anyone raises prices, it shoud be the manufacturers of said device. Demand would certainly support it. That means that Apple would inherently raise its prices to compensate for the increase of production. This would correlate with the question of someone paying $100 dollars more for an iphone.

I personally would not.

John B

posted on 27 Jul 2014, 15:13

44. xondk (Posts: 1374; Member since: 25 Mar 2014)


As much as I try to remain neutral, I'd be funny if apple flopped this time around, touting innovation left and right and now iphone 6, innovation? I can see OIS for the camera, some connectivity to health stuff, which as far as I know most phones can already do anyway, since most of those things are made with wide compatibility in mind...

Sooo what are they going to add to excite people and call innovating?

posted on 27 Jul 2014, 17:49

48. darkkjedii (Posts: 21186; Member since: 05 Feb 2011)


It'll sell mega millions, that's reality not "if".

posted on 27 Jul 2014, 18:03

50. xondk (Posts: 1374; Member since: 25 Mar 2014)


Well, yes.....it will sell regardless of innovation or not, but at least to me, if it fails to innovate, which apple seems to be screaming about that they are the biggest innovators, then it can still fail.

posted on 27 Jul 2014, 15:58

46. QWIKSTRIKE (Posts: 1127; Member since: 09 Mar 2010)


There won't be a gauge on supply and demand until the consumer steps up to the plate and start buying. When the consumer wants more than there is then you can try to increase the price to meet the demand.

Stuffing partner channels means nothing until there is actual sales. I do know that Sprint has a firm over priced commitment!

posted on 29 Jul 2014, 08:11

57. Taters (banned) (Posts: 6474; Member since: 28 Jan 2013)


I can't see how this would affect the pricing for the Samsung Alpha. Samsung doesn't use Foxxcon and even if they price hike their own components for themselves,which doesn't seem likely, we have no way of finding out where the 5 percent is going to go. In the Alpha's case, Samsung mobile will just take the hit or the Samsung parts department will just put it in as a write off expense.

So the only component that might affect Samsung pricing would be Sony camera. But think of it this way. Would you really want to piss off your second biggest buyer to appease your first biggest buyer? Especially one with its own imaging department? I doubt it. Samsung would get similar treatment than Apple if not the exact same or better treatment.

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