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

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

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58 Comments

1. twens

Posts: 1156; Member since: Feb 25, 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.

3. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 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).

13. Finalflash

Posts: 4062; Member since: Jul 23, 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.

25. darkkjedii

Posts: 30786; Member since: Feb 05, 2011

FF, would you consider trying the 6 out?

30. rallyguy

Posts: 620; Member since: Mar 13, 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.

41. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 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.

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.

54. JunitoNH

Posts: 1946; Member since: Feb 15, 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

42. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 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.

15. sipha

Posts: 439; Member since: May 12, 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!!

9. Leo_MC

Posts: 6396; Member since: Dec 02, 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.

17. Cicero

Posts: 1103; Member since: Jan 22, 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.

38. givemetacos

Posts: 16; Member since: May 12, 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.

51. mrblah

Posts: 577; Member since: Jan 22, 2013

troll

2. fzacek

Posts: 2486; Member since: Jan 26, 2014

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

4. appleDOESNT.com

Posts: 456; Member since: Nov 19, 2011

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

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.

22. InspectorGadget80 unregistered

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

23. Ninetysix

Posts: 2933; Member since: Oct 08, 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.

26. darkkjedii

Posts: 30786; Member since: Feb 05, 2011

Ouch town, population inspectorgadget80. +1

55. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

So you are homophobic too? Makes sense..

19. Napalm_3nema

Posts: 2236; Member since: Jun 14, 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.

31. rallyguy

Posts: 620; Member since: Mar 13, 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?

37. pulkit1

Posts: 354; Member since: Jul 03, 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 .

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.

56. Taters

Posts: 6474; Member since: Jan 28, 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.

52. pokerc

Posts: 60; Member since: May 24, 2012

Ummm yeah the nexus!!

39. givemetacos

Posts: 16; Member since: May 12, 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.

45. dome888

Posts: 86; Member since: Oct 10, 2012

law of economies of scale.

5. appleDOESNT.com

Posts: 456; Member since: Nov 19, 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

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