Here's How Apple Inc. Will Price Its Amazing OLED iPhone

Three Apple iPhones next to each other showing different aspects of the Apple App Store.

Product leaker Benjamin Geskin tweeted out how Apple (NASDAQ: AAPL) will apparently price its upcoming premium OLED iPhone models, which could be called either " iPhone Edition " or "iPhone X," depending on which reports you believe, citing a friend who has a friend at Apple.

The New York Times reported last month that the premium iPhones will start at approximately $999 -- a figure that Geskin echoed in his tweet. Per Geskin, Apple will follow its traditional pricing strategy and charge an additional $100 for each incremental storage tier.

That means $1099 for the premium iPhone with 256GB of storage, and $1199 for the premium iPhone with 512GB of storage .

Here's why this makes sense and why this should be good for Apple's iPhone business over the coming year.

Seems reasonable -- and legitimate

Although I did think that Apple could get away with charging more for each incremental storage tier on the premium iPhone (especially considering how pricey NAND flash -- the type of memory that smartphones like the iPhone use for their primary storage -- is these days), it's reasonable that Apple would stick to its tried-and-true pricing strategy.

After all, Apple is already charging a premium for the OLED iPhone to begin with, and increasing the cost to move up each storage tier could further compound any frustration that exists due to this.

I suspect that the 64GB model will be popular with those who, during the iPhone 7-cycle, would've opted for the 128GB iPhone 7 Plus.

Indeed, I doubt that most 128GB iPhone buyers needed 128GB, but they probably wanted more than just 32GB of storage, so the 128GB was their only sane choice. Those same types of customers will now have to stretch their budgets a little more (from $869 to $999) to get ahold of the entry level 64GB premium iPhone, but in exchange said buyers get a phone with a solid amount of storage capacity as well as all the goodies that Apple is planning for the premium device.

That sounds like a win to me.

I expect the 256GB model to appeal to most iPhone power users -- that is, those individuals who enjoy using their phones, download lots of apps, movies, and shows, and take lots of photos and videos. The 512GB model will probably be overkill for most of those individuals, but for the most enthusiastic power users (as well as those folks who simply want to have the cash to burn just to have "the best"), it'll have appeal.

I'd imagine that there will be enough of those types of users to make it worth Apple's time to build such a variant. It's really a relatively low-risk way to drive iPhone average selling prices up, even if the impact to the average is on the order of a couple of dollars (which, multiplied by about 200 million, is serious cash).

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The author(s) may have a position in any stocks mentioned.

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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