Apple Inc. (NASDAQ:AAPL) needs to offer freebies if it wants to encourage consumers to accept a reported US$1,000 price tag for the new iPhone, according to Barclays analysts.
Barclays has argued that raising iPhone’s price makes customers less likely to buy the handset so Apple needed to offer something in return to justify the cost of the new device.
Analyst Mark Moskowitz and his team suggested a free one-year subscription to Apple Music and iCloud would entice customers. Such a deal would deliver US$155.76 in value to iPhone customers while costing Apple just less than a third of that total, the analysts said.
Barclays said its analysis showed that consumers’ buying intention falls in half when compared with an US$800 price point.
Moskowitz expects Apple will sell 40 million new iPhones in 2018 but that this number would grow by 24 million if the company takes his recommendation, providing an extra US$9.8bn in revenue and US$1.3bn in gross profit.
Apple has confirmed it will unveil its new iPhone on 12 September at the Steve Jobs theatre at its new headquarters in Cupertino, California.
The tech giant is expected to launch three new iPhones, including two updated versions of the iPhone 7 and a premium 10th anniversary iPhone 8 that features facial recognition and an edge-to-edge all-glass display.
Shares in Apple dipped 0.42% to US$163.35 each in US pre-market trading and later in the regular session were down 1.20%.