NEW YORK (
(AAPL - Get Report)
iPhone 5 will undoubtedly be a
when it finally makes its debut, although analysts say that rumors of an $800 iPhone are overblown.
Sparked by chatter in the
has been alight with rumors that the iPhone 5 will cost $800. The hashtag '#800DollarsForaniPhone' was the top U.S. trending topic on Thursday morning, with 'iPhone 5 $800' also popular.
Analysts, however, believe that the rumor is overblown.
Hudson Square Research's Dan Ernst says that Apple's approach has typically been to pack more features into its phones, without massive price hikes.
is anything to go by, there will be significant changes to the iPhone. The phone is expected to have 4G or Long Term Evolution (LTE) capability, a 4-inch screen, and perhaps in-cell technology that lets Apple integrate touch sensors into the LCD making the phone thinner.
If Apple were to sell the high end version of the iPhone 5 at $800, this would be a stark contrast from previous versions. The 64 GB iPhone 4S costs $399 with a two-year contract from
. Apple has kept the price of its products fairly stable, so it's hard to see a drastic increase in price for the next iPhone. Ernst also noted that since developed markets have smart phone penetration above 50%, "carriers appear to be more interested in reducing not growing subsidies."
An $800 iPhone would also wreak havoc with Apple's margins. Apple's fourth-quarter iPhone margin guidance was conservative at 50%, but Piper Jaffray's Gene Munster said an $800 iPhone would give Apple an iPhone margin in the mid-70% range, versus the current 60%.
The analyst told
that a 20% margin shift is highly unlikely. "Apple's guidance backs into a 50% margin for the iPhone," he noted, in an email. "We think Apple's guidance is conservative, but not that conservative."
Twitter users nonetheless tweeted some funny and interesting things should that be an accurate price. One user
"If I lose my phone, it better find ME!" Another user
that for $800, "it better come with a free gas for a year gift card."
Even with all the advancements and new features that are speculated to be in the phone, one
is expecting a lot more for $800. "I better get shares of Apple upon purchase!" the tweet said.
reportedly gets closer, we'll know soon enough just how much Apple intends to charge for the latest iPhone. An Apple spokeswoman declined to comment on the rumor.
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Written by Chris Ciaccia in New York