Apple CEO Cook Justifies Premium iPhone XS Max Pricing, Says Innovation Is Expensive

Reviews for the iPhone XS and iPhone XS Max are filtering on to the internet this morning, and Apple CEO Tim Cook is out touting his company’s new flagship smartphones. However, the new phones come at a hefty price – especially with regards to the bigger of the two smartphones. Apple first danced with a $1,000 smartphone with last year’s iPhone X, and the iPhone XS Max takes that trend and runs with it.
Apple iPhone Xs line up front face 09122018
Apple iPhone XS and iPhone XS Max

Cook went on Good Morning America to talk about Apple and its new wave of products (including the Apple Watch Series 4), and the topic of pricing was brought to the forefront. “We want to make an iPhone for everyone. That’s always been our objective,” said Cook, when pressed on the fact that many consumers might be “priced out” when it comes to its new flagships. Cook pointed out the fact that the iPhone range starts at $449 (iPhone 7) for those that want an affordable smartphone, however, it’s worth pointing out that the device is two years old at this point. Apple discontinued the iPhone SE, which started even lower at $349. 

He also suggested that the pricing of the new flagships is justified because of the ultra-fast A12 Bionic processors, up to 512GB of internal storage, Gigabit LTE and improved cameras. Cook also pivoted, saying that most people don’t pay the full cost of the phone upfront, and instead pay in monthly installments through their carrier, which helps lessen the financial burden.

iPhone XR blue back 09122018
Apple iPhone XR 

“If you look at even at the phone that’s priced over $1,000, most people pay about $30 a month for an iPhone or $1 a day,” Cook explained. “People want the most innovative product available, and it’s not cheap to do that.”  

This is what pricing looks like for Apple’s new 2018 iPhones: 

iPhone XR

  • 64GB: $749
  • 128GB: $799
  • 256GB: $899

iPhone XS

  • 64GB: $999
  • 256GB: $1,149
  • 512GB: $1,349

iPhone XS Max

  • 64GB: $1,099
  • 256GB: $1,249
  • 512GB: $1,449

tim cook
It should be noted that more expensive phones like last year’s iPhone X have helped Apple reach its $1 trillion market cap. During its most recently quarterly earnings report in early August, Apple stated that the average selling price for all iPhones skyrocketed from $605 in Q3 2017 (before the iPhone X launched) to $728 in Q3 2018. Apple also confirmed that the iPhone X has remained its best-selling phone model ever since its launch despite its high cost.

Expect those ASPs to rise even higher now that the iPhone SE has been discontinued and with the new “standard” iPhone XR being priced from $749.