Will consumers pay $999 for the iPhone 8?

Last week Samsung unveiled its Galaxy Note 8 with a starting price of £869. Apple is set to unveil its latest iPhone later this week and if the rumours are to be believed, it could be the most expensive smart phone yet. Expected to cost $999 in the US and even more in the UK, consumers look like they are going to have to get used to forking out small fortunes if they want to have the latest devices. 

To put it into context, for around the same amount of money you could buy yourself a MacBook Air. The thought of paying the same amount for a phone as a laptop was previously unthinkable. And there are plenty of other decent laptops on the market that retail at a lesser price than top-end phones.

With the cost of phones rising and manufacturers testing the limits of consumer tolerance, it begs the question: will people continue paying the high prices and what is the glass ceiling for smartphone device prices?

Well, for now at least, it appears that consumers are happy to hand over the cash. According to data from Censuswide, 69 per cent of iPhone owners in the UK plan to upgrade to the iPhone 8, despite the anticipated higher cost. That said, a tenth of iPhone owners said they would abandon the Apple smartphone in search of a cheaper alternative. While 30 per cent of British smartphone users are considering upgrading to the iPhone 8, more than a third were planning to opt for Samsung for their next upgrade.

That said, Dixons Carphone has warned that the market is suffering as people are holding on to their devices for longer due to higher costs. Chief executive Seb James said that the more expensive costs means that customers are not upgrading their phones as frequently. As a result the company has had to adjust its business plan to make up for the likely losses. 

“Currency fluctuations have meant that handsets have become more expensive whilst technical innovation has been more incremental,” James said. “As a consequence, we have seen an increased number of people hold on to their phones for longer and while it is too early to say whether important upcoming handset launches or the natural lifecycle of phones will reverse this trend, we now believe it is prudent to plan on the basis that the overall market demand will not correct itself this year."

Apple’s iPhone 8 is expected to be unveiled next week, with a 10th anniversary phone also in the pipeline.