Later this year, Apple (NASDAQ: AAPL) is expected to launch its much-rumored premium iPhone with an OLED display. The phone itself, according to KGI Securities analyst Ming-Chi Kuo, is expected to fit in a physical footprint like that of today’s 4.7-inch iPhone. The cool part, though, is that Apple is reportedly going to fit a full 5.8-inch OLED display in that footprint.
Now, Kuo says that not all that 5.8 inches of the display will be what he refers to as “active display area.” Indeed, a sizable portion of the display will be dedicated to what he refers to as an “area for functions (e.g., allocation of virtual buttons),” leaving just 5.2 inches of active display area.
This all sounds good, and I think the phone has the potential to do quite well in the marketplace, even at a relatively high price compared with the “standard” iPhone models. However, I can’t help thinking there’s one obvious omission from Apple’s upcoming product lineup.
Where’s the big OLED iPhone?
When Samsung (NASDAQOTH: SSNLF) announced its Galaxy S8 series of devices, it rolled out two models. The first, known as the Galaxy S8, features a 5.8-inch full-face OLED display. This model, Samsung says, will sell for $720.
Samsung also offers a higher-end variant, called the Galaxy S8+, which includes a larger 6.2-inch full-face OLED display. The company charges $840 for this one — a hefty $120 premium.
Apple is expected to charge north of $1,000 for the upcoming OLED iPhone, and to be blunt, I think the company will still see robust demand for the device in that price range. However, I can’t help thinking Apple is leaving money on the table by not planning a larger option alongside the 5.8-inch option — say, 6.2 inches.
Such a device could command a premium over the “standard” OLED iPhone and, with the right additional features, could be a strong seller. The ultimate impact from the introduction of such a product would be a richer product mix with higher iPhone average selling prices and potentially higher total profits, too.
Maybe that’ll be next cycle’s trick
What Apple could potentially do is save such a larger premium iPhone for its next product cycle. After all, once this year’s OLED iPhone hits, Apple will need to come up with ways to make next year’s products compelling enough to spur iPhone upgrades and capture more premium smartphone share.
Going forward, I could see Apple releasing not one, two, or even three new smartphones per year, but at least four: the two “standard” iPhone models — the successors to the iPhone 7s and iPhone 7s Plus — and two “premium” iPhone models.
Apple could conceivably endow such a larger premium iPhone variant with even more features than it can fit in the bill of materials of the smaller premium iPhone. Such a device would certainly be quite expensive — at least as smartphones go, anyway — but I suspect a large segment of the iPhone buying population would be willing to pay more just to have the very best features and technologies.
After all, that’s the thinking behind this year’s OLED iPhone, right?
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