Apple's full-size iPhone 12 prices a minimum of $ 100 greater than final 12 months's iPhone 11


Apple CEO Tim Cook unveils the new iPhone 12.


Apple announced new iPhones in a little over an hour-long video presentation on Tuesday, showcasing the new devices' faster chips, 5G speeds and features, and improved cameras.

One of the most important pieces of information for investors and customers, however, had significantly less stage time: changes in the segmentation and pricing of the iPhone product line.

Apple has changed its iPhone lineup so the new model, advertised for $ 699, is now a mini device with a smaller screen. The iPhone 12, the direct successor to the iPhone 11, received a price increase to $ 799. Some people pay even more – the phone costs $ 829 if it's not paired with Verizon or AT&T cellular service, according to Apple's website. (The iPhone 12 Mini costs an additional $ 30 without cellular.)

Here is the full range, including the low-end iPhone SE and earlier models with price cuts:

  • iPhone SE (2020) – $ 399
  • iPhone XR (2018) – $ 499
  • iPhone 11 (2019) – $ 599
  • iPhone 12 Mini (2020) – $ 729
  • iPhone 12 (2020) – $ 829
  • iPhone 12 Pro (2020) – $ 999
  • iPhone 12 Pro Max (2020) – $ 1099

Apple now has an option for $ 100 each from $ 400 up to $ 1,100 that allows it to compete with Android devices in the low- to mid-range market without its expensive high-end models to have to cannibalize. The lower-cost options also provide Apple with powerful products for emerging market consumers who may be less inclined to use thousands of dollars in phones.

This is the second time in two years that Apple has adjusted prices on its highest volume phone. Last year, the iPhone 11 received a price cut to $ 699, $ 50 less than its immediate predecessor, the iPhone XR. Cook said Apple “got the right price” with the iPhone 11 in January when it came to the device.

Consumers like bigger screens

Last year, the iPhone 11 was the top-selling iPhone in the middle of the road in the vacation quarter, Apple CEO Tim Cook said in January. If the iPhone 12 becomes likely the most popular of Apple's current models, the surge could increase the average iPhone retail price, an important metric for Apple investors.

Apple no longer reports the average selling price of the iPhone on a quarterly basis, so investors have to pull the details back from executive comments and other market research. However, a higher average selling price for iPhones would likely increase the segment's overall sales, Apple still reports.

Apple has a new device for $ 699, the iPhone 12 Mini, which the company claims has the same features as its bigger sibling. It only has a smaller 5.4-inch screen as opposed to a 6.1-inch screen. In fact, the Mini has the smallest screen of any new iPhone launched since 2017, though it's still bigger than the screen of the low-end iPhone SE, which is based on the iPhone 8 design.

Smartphone consumers have shown great preferences for larger screens. The iPhone 12 is expected to be the best-selling iPhone among the new models with around 40% of shipments, TF Securities analyst Ming-Chi Kuo predicted in a note on Monday before the phones were officially announced.

One way to look at Tuesday's event is that Apple is now offering a wider range of devices at more prices than ever, giving consumers an option at every major price. It just happens that the device that is expected to be the best-selling in the range has received a price increase.

The iPhone lineup

Source: Apple Inc.

The expansion of the product range is a trend for Apple this fall. Last month, a cheaper Apple Watch, the SE, was released, giving Apple a clear, three-device, entry-level wearable line of products (the Apple Watch 3 for $ 199). Sweet Spot (the Apple Watch SE valued at $ 279) and Enthusiasts (the Apple Watch 6 valued at $ 399)

The biggest news for Apple investors could be that the company can segment its customers even better.

WATCH: Apple's pricing is key to growth


Steven Gregory