Apple iPhone 6 Rumors: Larger Display, Concerns About Profit Margins Could Drive Up The Price Tag

Apple (NASDAQ:AAPL) may be considering raising the price of its 2014 iPhone model, dubbed the “iPhone 6,” according to an analyst, who believes a larger screen size and concerns about profit margins could prompt the company to implement the price change.

It has been just two months since Apple released the iPhone 5s and iPhone 5c, but industry analysts have already begun wondering about the iPhone 6 and its price. Chris Caso of Susquehanna Financial Group is one of those analysts who think that a larger display and other improvements would raise the cost of materials used to make the iPhone 6, which would likely increase the smartphone’s retail price.

“We think Apple could get away with a $50 to $100 premium for a larger screen-size iPhone 6,” Caso wrote in a research note, obtained by AllThingsD. “We think such a move could avoid the margin erosion that occurred when the iPhone 5 was launched.”

When it releases a new iPhone, Apple typically keeps the new phone's price at the same level as the previous model, and it usually cuts prices only slightly on older editions of the handset. If Caso’s estimates are accurate, the iPhone 6 could be priced at somewhere between $249 and $299, instead of $199, with the two-year contract, the report said.

Apple launched the new iPad mini with Retina display in October with a price tag of $399, which was $70 more than the $329 of the first-generation iPad mini. According to AllThingsD, the company may employ a similar tactic for the iPhone 6 next year if the smartphone’s cost of materials require a higher price to maintain current profit margins.

Rumors about a bigger iPhone have been around for quite some time now. A report from Bloomberg suggested last week that Apple could release two new models of the iPhone in the third quarter of 2014, with both versions featuring “larger displays with glass that curves downward at the edges.”

According to the report, the two new iPhones will feature screen sizes of 4.7 inches and 5.5 inches, respectively, and the latter model is expected help Apple position its flagship smartphone strongly against the 5.7-inch Galaxy Note 3.

In September, The Wall Street Journal reported that the Cupertino-based tech giant was considering getting into the so-called “phablet” segment by testing iPhones with screen sizes ranging from 4.8 inches to 6 inches.