iPhone 5 Speculation: Why the iPhone 5 May Cost More

April 1, 2012

Apple’s iPhone has continually evolved in terms of features and look, but one thing that’s more or less stayed the same over the years is the price point. The cheapest new iPhone has always been priced at $199 with a two-year contract, and the most expensive iPhone has usually been $299 or $399 with a two-year contract. That’s something that might just change with the release of the iPhone 5. Although Apple generally prefers to keep each new generation of their popular devices priced the same, they might not have a choice with the iPhone 5. Why? Well, there’s several reasons for a possibly more expensive iPhone 5, which we’ll cover here.

iPhone 5 May Be More Expensive Due to Bigger Display

Take a look at many of the Android phones on the market with 4.3″ or large displays. See the pattern? They generally debut with a $299 (or perhaps higher) price tag. The more expensive price is due to a few reasons, but the biggest one is the bigger display. With the rumors of an iPhone 5 with a display as large as 4.6 inches (or an iPhone 5 with a 4 or 4.3 inch display), it’s not unthinkable that the iPhone 5 would be priced comparably to, say, the Samsung Galaxy Note which retails for $299 with two-year contract. And though some iPhone 5 potential buyers may be mad about the more expensive price tag, we still think many will be willing to pay extra for the iPhone 5 if it comes with a larger display.

4G LTE May Cause iPhone 5 Price Hike

Here’s another feature that the iPhone 5 is very likely to have: 4G LTE connectivity. It’s something that iPhone users have been requesting for a while now, and it’s something that nearly all new Android phones on the market come standard with. Although 4G LTE certainly isn’t available everywhere yet, it is a piece of technology that Apple would be crazy to ignore–which is what we saw with the new 4G LTE iPad–implementing into the iPhone 5. The only problem is that the 4G LTE technology is more expensive, which means the iPhone 5 production cost will likely increase. And a higher production price, like it or not, will be passed onto iPhone 5 buyers.

iPhone 5

iPhone 5 May Be More Expensive Due to More Storage Space

As many iPhone 4S owners with the 16GB iPhone 4S model will tell you, the 16GB (or 13GB after the iOS space is factored in) of storage just won’t cut it when you’re taking lots of photos or high definition videos with the device. It’s also not large enough to contain many music libraries. Just as Apple phased out the 8GB iPhone 3GS model with a 16GB iPhone 4 model at the same price point, we’d expect the iPhone 5 to come with more space. The only problem is, the cost of storage hasn’t gone down, especially due to production delay problems in China. That means that if Apple only offers iPhone 5 models in 32GB, 64GB and 128GB, the price of the iPhone 5 is probable to start at $250 and run up to $400.

Higher Production Costs Means Higher Retail Cost

The iPhone is only getting more expensive to produce, much like its bigger brother the iPad. Although Apple is still reaping profits from the iPhone, they can’t expect to continue to make big money if they’re barely breaking even on the iPhone 5. That’s why we think a slight increase in price for the iPhone 5 is so likely–from a financial standpoint, it makes sense, as the iPhone 5, regardless of price, WILL be in high demand.

What Do You Think?

Would you be willing to pay more for the iPhone 5? Leave us a comment below and make your opinion heard.

{ 6 comments… read them below or add one }

JoeShmoe99 April 2, 2012 at 1:50 pm

I can see why the price may increase, but the i5 will also have to compete against solid rivals like the S3 and One. Some people will stick to Apple no matter what, but you always want to increase your customer base so you can't drift too far off a certain price point. I'd say that if there is an increase, it'll be less than $100/unit. More like $50/unit, if anything at all.

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JoeShmoe99 April 2, 2012 at 1:50 pm

I wonder if people would go for a three-year contract with a carrier with a built-in warranty plan in case of damage for the third year only. That way, the carrier pays more to Apple but gets a higher return from the customer, and the customer keeps the same phone with no worries about damage in the third year. I'd definitely consider that option if the i5 truly is revolutionary. It's hard to imagine what can be added in the next three years that manufacturers have not already built in. A better camera? Not a big deal for me. 5G probably isn't coming out any time soon. Faster processor – yes, definitely, but that's not a deal breaker. I still have the first gen iPad and don't feel the slightest need to go out and buy the New iPad despite it's faster processing and better screen. About the only big thing different from the iPhone 3 to the iPhone 4S is Siri, and that's more of a gimmick than anything else (and it's still in beta anyway).

Something to ponder for the carriers and Apple maybe.

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Michelle Canever April 3, 2012 at 8:36 am

Hey Joe,

I like that idea. Having damage past the 2nd year is one reason why I've always upgraded within 2 years of buying the phone. I'd be willing to hang onto my iPhone 5 a bit longer if the device comes with a solid warranty like the one you're suggesting.

Thanks for the comment!

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Curtis April 3, 2012 at 10:51 pm

4g lte did not change iPads price, bigger storage might not even be required because they could have buy iPhone 5 get a extra 5gb on icloud(which I don't want verses bigger gb model) plus apple knows they are going to make less money off iPhone 5, though so $5 less on bigger screen, apple is not going to cry about it. And all these things are dropping in price. Apple loves keeping people happy which includes price so apple if anything will look for cheaper methods of reducing things like horrible glass for something cheaper. Apple might even drop the iPhone price to $195-$175.(for that it would haft to be some upgrade like iPhone 4s,s.whick I think the first 4s stranded for iPhone Siri

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Michelle Canever April 4, 2012 at 8:42 am

Hi Curtis,

You bring up some good points. It is possible that the iPhone 5 might actually cost less than the iPhone 4S or any other iPhone model. We'll just have to see.

Thanks for commenting!

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james braselton April 22, 2012 at 4:54 pm

hi there yeah iphone 5 cost more with 128 gb flash storage i want a 128 gb iphone with a 3d screen too

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