The $1000-a-phone gamble for Apple chief Tim Cook

BETTING against Apple has been an expensive business this year. The US tech giant’s shares have risen almost 40%, taking it within sight of becoming the first $1 trillion company.

Apple’s stock market fans reckon today’s launch of the iPhone X at its new mothership headquarters in California might help push it over the line.

I’m more sceptical. Apart from the corporate hubris that makes me suspect any big business splashing out billions on a new HQ (think Royal Bank of Scotland’s lavish “Fredinburgh” offices before the crash), I’m worried about the price of this whizz-bang phone.

The iPhone X may have all the gizmos in the world to get the aficionados panting, like an edgeto-edge screen, facial recognition technology and a new camera, but how many will be willing to stump up $1000 for it?

One technology analyst reckons some people value their phones “even more than food or sex” (hmmm) but the fact is that fewer people are upgrading their phones as regularly nowadays, because the incremental gains from model to model are that bit smaller; it isn’t worth the effort or the expense, as Dixons Carphone found in a recent profit warning.

There’s a danger that the iPhone X falls into that trap, and customers instead plump for the cheaper upgraded iPhone 7 and 7 Plus, also expected to be unveiled today.

The hefty price tag is a result of much higher manufacturing costs, which industry estimates put at almost double the iPhone 7. And market rumours of glitches with the face ID technology have knocked the shares a little in recent weeks, sparking fears of potential shortages during the key Christmas season.

Remember too that the iPhone accounts for almost two thirds of Apple’s revenues but, across the wider market, Apple and Samsung are struggling to maintain their market share against cheaper Chinese rivals: hence this is a big bet for chief executive Tim Cook. In a less sympathetic light, selling a phone this dear could also be taken as a symptom of maturing markets where virtually everybody has a smartphone and growth is hard to come by: one of the few options left available is putting the price up.

How long you can get away with it is the question. I thought that the march of technological progress meant that things were supposed to get smaller and cheaper, but Apple seems dead-set on defying that law.

The number-crunchers say Apple tends to outperform in the six to 12 months after new launches but I wouldn’t touch the shares: as Cook’s spaceship touches down in Cupertino, I just wonder whether $1000 iPhones might be the moment Apple jumped the shark. @russ_lynch