Katy Huberty prices the 2019 iPhones

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For starters, she says, assume all legacy iPhones except the SE get a $100 price cut.

From a note to Morgan Stanley clients that landed in my inbox Wednesday:

In response to a question on price elasticity during Apple’s last earnings call, Apple CEO Tim Cook said, “we price for the value that we’re delivering”, suggesting to us the new iPhone line-up will remain priced at the very high-end of the premium smartphone market. That said, we don’t expect the upper end of the iPhone price points to increase materially, and in order to get more comfortable with how pricing variability will affect FY19 ASPs, we conducted a detailed scenario analysis, found below.

In our scenario analysis, we assume 1) all “legacy” iPhone models will get a $100 price cut (iPhone SE will get a $50 cut) this fall, 2) the mix of legacy model iPhone shipments in FY19 will be similar to FY18 estimates (legacy models comprise 34% of shipments), 3) the shipment mix for the 3 new iPhone models will approximate C2H18 build mix (found here), and 4) the larger storage capacity SKUs for the new models will be $150 more expensive than the lower capacity SKUs. We then introduced 5 different pricing scenarios (Exhibit 1)

Morgan stanley iphone asp 2019
Click to enlarge. 

My take: I wouldn’t rule out Scenario 1: An iPhone that starts at $1,099.