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Apple's newest iPhone could have big screen, big price

Reuters logo Reuters 12/9/2018 By Stephen Nellis and Sonam Rai

a clock sitting in the dark: The Apple logo is pictured behind the clock at Grand Central Terminal in the Manhattan borough of New York © REUTERS/Carlo Allegri/File Photo The Apple logo is pictured behind the clock at Grand Central Terminal in the Manhattan borough of New York By Stephen Nellis and Sonam Rai

Apple Inc is expected to blast further past the $1,000 (768.70 pounds) price barrier when it launches new iPhones on Wednesday, but Wall Street is most intrigued by how deep into its larger-than-ever lineup prices hikes may go.

Apple's market capitalization has passed $1 trillion and the company needs to sustain revenue growth from its signature product even as global demand for smart phones plateaus. One way to do that is to get people to buy more expensive phones.

"There’s no real game changer on the table," said Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel. "It’s a matter of getting people to keep moving up."

The new top model is expected to have a 6.5-inch (16.5-cm) screen with an edge-to-edge display and be called the iPhone X Plus or Max. It would have an OLED display with richer colours, and Wall Street is targeting a price of $1,049 or $1,099 versus the current $999 base price for the iPhone X.

A second phone with a 5.8-inch OLED display, likely called the iPhone Xs, would be similar to the iPhone X but with an improved processor.

A woman looks at the screen of her mobile phone in front of an Apple logo outside its store in Shanghai © REUTERS/Aly Song A woman looks at the screen of her mobile phone in front of an Apple logo outside its store in Shanghai

But it is a third expected model with 6.1-inch display, potentially called the iPhone 9, that has intrigued analysts most. The big display is expected to use lower-cost LCD technology but look more like last year's iPhone X than the iPhone 8, which itself looked similar to phones going back to 2014's iPhone 6.

Apple declined to comment.

That fresher profile could help lure price-conscious Apple customers with three- and four-year-old phones into an upgrade, said Eddins. Expectations for Apple's lineup have been fuelled by reports from Apple analyst Ming-Chi Kuo, who is based in Taiwan, where many of the contract manufactures that also make Apple products are based.

While some expect a $699 price for the iPhone 9, Goldman Sachs analyst Rod Hall sees as much as $849, a significant bump for a mid-range device.

"Given the better-than-expected iPhone X demand this summer we doubt Apple is inclined to go for lower price points," Hall wrote in a note to clients.

Rival Samsung Electronics Co Ltd (005930.KS) has a few models that cost nearly as much as Apple models, but the bulk of its lineup, like that of other phone makers, consists of cheaper models.

"Apple has never competed on price," said Josh Blechman, director of capital markets at Exponential ETFs, which holds Apple shares in its exchange traded fund.

In addition to new models, Apple is also expected to unveil a gold-colour option for the two new OLED-screened phones, a new version of its wireless Airpods earbuds with wireless charging and a new version of its Apple Watch with a bigger display. It also is expected to release a wireless charging mat that will be able to charge several devices at once.

(Reporting by Sonam Rai in Bengaluru and Stephen Nellis in San Francisco; Editing by Lisa Shumaker)

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