Why the next iPhone’s rumored high cost is more justified than Galaxy Note 8's.

Galaxy Note 8 reviews are out and most reviews mention that the price of the phone is extremely high starting at $930. In the wake of this criticism many Galaxy Note fans and Android enthusiasts feel that if it is not justified for the Note 8 have this price then they feel that even the next iPhone doesn’t deserve the rumored high cost of starting at $999 and would deserve more criticism.

I differ from this argument. The next iPhone (iPhone 8/X/Pro/Edition) is not same as the Galaxy Note 8 nor does it belong to the same category or segment. This new rumored iPhone is a new premium tier iPhone while the Galaxy Note 8 is an upgrade to an existing model.

It is very important to always keep in mind what the placement of the product is in the market and what story is being sold along with it. Galaxy Note is an upgrade to an existing model in Samsung’s line up. Note 8 is a typical annual upgrade to a previous year’s model and arguably pretty modest one at that. I would even argue that the Galaxy S8 and Note 8 are not much different other than for the dual cameras and the S-pen. So considering that, Note 8 costs $300-$350 more then the S8 and $100 more expensive than the already expensive Note 7 . This is a clear indication as to why the tech reviewers are calling Note 8 expensive.

Coming to the next iPhone, it is important to remember that Apple is not increasing the price of the upcoming iPhone 7S and 7S Plus, the upgrade to existing models. Apple is introducing an all new premium tier third model, specially catering to the premium niche of the high end segment.

One can argue about the specs and say that the new iPhone may have same or lower specs than the Note 8. It’s not always about the specs. As I mentioned, placement of the product in the market is also very important. Apple will be marketing this phone as a premium or pro device, which in itself garners a higher price. The best way to understand this is by considering the Mac Pro. Mac Pro is a premium computer and very expensive. One cannot look at the Mac Pro’s specs and compare it to a cheaper workstation PC and dismiss the price. Mac Pro is a premium computer and it has made a market and category for itself.

Product placement, specs, design and context all get factored in while deciding on a price, not specs alone. The next iPhone will be radically new compared to the existing iPhones. It will have so many new features for the very first time in an iPhone. This iPhone is not an evolutionary upgrade. It is a drastically new phone in the existing iPhone line-up and this context is really important though some of these features may already be present in existing Android phones. (1)

This is why it is more justified for the next iPhone to have a high price when compared to a Galaxy Note 8. It may be justified, but we have to wait and review the next iPhone to see if its worth the price.

(1) (Even then the next iPhone is rumored to have features that no current Android phones have like a pro-motion display, 3D sensing abilities, Neural Engine and revolutionary Face ID. New to iPhone features like wireless charging, OLED and almost bezel-less display)