How iPhone prices have changed over the years as Apple tests new cost strategy

New iPhone 11 will cost Dh2,949 – Dh230 less than the price tag of last year’s low-cost iPhone XR

iPhone 11 smartphone is displayed after an event in Cupertino on Tuesday. Bloomberg

One of the surprises of Apple’s product event in Cupertino on Tuesday was not any ground-breaking hardware but the pricing of its newest iPhones.

Consumers will shell out Dh2,949 to buy a new iPhone 11, Dh230 less than the launch price tag of last year’s low-cost iPhone XR. So far, this is the biggest yearly drop in iPhone's 10-year history for a new device of similar specs to the upgraded model.

"This over $50 decrease [in price] might not move the needle for certain developed countries but it will play [a] crucial role in big markets like India, where Apple wants to get the pricing right," Tarun Pathak, an associate director with Hong Kong-headquartered research firm Counterpoint, told The National.

With a 14.7 centimetre screen, iPhone 11 Pro will start from Dh4,219, while the top-end of the lineup, the iPhone 11 Pro Max, will cost Dh4,639. The latter smartphone will come with a 16.5cm screen; an inch bigger than the screen of the iPhone 8 Plus.

Both iPhone 11 Pro and iPhone 11 Pro Max are priced Dh10 cheaper than the launch price of their predecessors iPhone XS and iPhone XS Max.

Industry analysts say dropping prices may inspire new customers to buy an iPhone or encourage existing users to upgrade to a new device.

“Many of the users who purchase lower priced devices will eventually become customers of Apple services,” Jitesh Ubrani, research manager at researcher International Data Corporation wrote in a note.

Services play a crucial role in Apple’s future business. Its services business was up 13 per cent in the last quarter to June, while the consumer tech giant's overall net profit dropped 13 per cent year-on-year to Dh36.88 billion.

“They [Apple] have shown they can do this in the past with hardware: If you bought an iPhone you were likely to buy an iPad or AirPods,” added Mr Ubrani.

The price cut on the iPhone 11, which replaces the iPhone XR is a good move, according to Abbas Ali, managing editor of TechRadar Middle East.

“Low-cost iPhone[s] will attract customers who are using older models,” he added.

Apple is also offering attractive trade-in programmes to encourage customers to switch to a new iPhone.

“Trade-in prices for new iPhones indicate that Apple is also addressing another problem which is the upgrade rate of iPhones. Apple wants iPhone users to upgrade faster,” said Mr Pathak.