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Hefty price tag of Apple's iPhone X may deter some overseas consumers, analysts warn

US consumers may be willing to pay the higher price of the iPhone X but overseas customers are more sensitive, according to UBS
iphone x
Apple unveiled the iPhone X at its new headquarters last night in Cupertino, California

Apple Inc. (NASDAQ:AAPL) offered few surprises with the release of the iPhone X following leaks and some analysts believe the expensive price tag may be pushing the envelope with some customers.

At its product launch last night in California, the tech giant unveiled three new iPhones including the iPhone X -- a premium version to mark the 10th anniversary of the device -- the iPhone 8 and iPhone 8 Plus.

The launch confirmed much of what was already known following a leak from within Apple ahead of the event. 

The starting price of the iPhone X is US$999 with features including facial recognition to replace the fingerprint sensor for unlocking the phone, a 5.8-inch edge-to-edge OLED screen, wireless charging and water and dust resistance.  It also has a feature that uses the camera to analyse facial expressions to create animal emojis.

The two IPhone 8 handsets are basic upgrades to the iPhone 7 with an all-glass design, a 12MP dual-camera and a new A11 Bionic processor that is 70% faster than the previous A10. The starting price of the iPhone 8 is US$799.

READ: Apple's iPhone X is the handset they've been dreaming of

“We have two primary takeaways. Regarding F18 (full year 2018), iPhone pricing was a bit higher than we expected; the company is pushing the envelope likely in the belief that its innovation warrants higher prices,” UBS said.

“Our EPS (earnings per share) estimate of US$11.15 does not change at an iPhone ASP (average selling price) of US$724 on an iPhone X contribution of 35%.”

UBS said while US consumers may be willing to pay the higher prices, overseas customers are more sensitive.

Apple has priced every new product at the same price in pounds and dollars, taking into account currency fluctuations, import costs and taxes.

The Brexit vote has seen the pound slump against the dollar – it is now worth about 75p to $1. 

In China, where Apple’s sales have suffered, the cost of the new iPhone is roughly double the average monthly salary in the nation.

Greater China accounted for about 18% of iPhone sales in the quarter ended July, making it its third biggest market after the US and Europe.

“Although the new iPhone is seen as the future of the smartphone, with its augmented reality feature, its price tag will certainly be a drag on its accessibility to a large pallet of consumers, especially when it comes to the biggest growth potential markets such as emerging Asia,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

Shares in Apple fell 0.56% to U$159.92 each in US pre-market trading. 

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