Just like it did with the introduction of the iPhone 6 Plus back in 2014, Apple is betting on the launch of an iPhone with a bigger screen to drive sales. As a report from WSJ highlights, Apple will be unveiling the 5.8-inch iPhone XS and 6.5-inch iPhone XS Plus, with the latter helping boost the company’s profit margins.
The iPhone XS Plus will cost Apple just a wee bit more to manufacture than the 5.8-inch iPhone XS. The company is able to achieve this because of a tight control over its supply chain. As analyst Wayne Lam from IHS Markit points, with the iPhone 8 Plus, Apple earned $77 more in profits when compared to the iPhone 8. This was because the former cost the company $288 to manufacture, just $33 more than the 4.7-inch iPhone 8.
Market research firm Kantar Worldpanel claims that users with a 6-inch or bigger device use twice as many apps on their devices as a person with a 5.5-inch smartphone. They are also 62 percent more likely to play games and watch videos daily on their device compared to people with smaller screens. This provides Apple with more opportunity to make more money from such customers through its Services business.
“The bigger the device, the more people are getting out of it, and the more opportunity there is for Apple to generate money from them,” said Jennifer Chan, analyst with Kantar Worldpanel. She added that the larger phones typically carry faster processors, more memory and better graphics than smaller devices, which also contribute to usage.
Apple will also be offering the iPhone XS Plus in dual-SIM configuration in certain parts of the world like China and India where this functionality has become very popular among consumers.
In addition to a larger 6.5-inch iPhone XS Plus, Apple will also unveil a budget 6.1-inch iPhone XC. This handset should particularly do well in price-sensitive markets like China and parts of Asia where budget smartphones are all the rage. The handset is expected to carry a price tag of around $699.