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Why the upcoming iPhone 8 might cost more than $1,000

Key Points
  • KGI Securities analyst Ming-Chi Kuo says Apple is charging a premium for its new OLED displays.
  • Apple typically spends less on LCD panels.
  • The OLED screens are much nicer, but cost more, and they reportedly will be supplied by rival Samsung.
Tim Cook
Sally Shin | CNBC

Samsung may be to blame if the iPhone 8 costs more than $1,000.

According to MacRumors, KGI Securities analyst Ming-Chi Kuo — a widely followed and historically accurate Apple analyst — said this week that Samsung is likely charging Apple up to $130 per display used in each iPhone 8 unit.

Samsung is rumored to be the primary supplier of new OLED screens that are brighter, more colorful and more efficient than the LCD display Apple typically uses.

IHS, a firm that typically breaks down the bill of materials for each iPhone, said last year that the display in the iPhone 7 cost Apple about $39 each.

According to those prices, Samsung's screens are adding about a $100 premium to the bill of materials. This might explain why reports and analysts are suggesting that Apple's new iPhone will cost anywhere from $1,000 to $1,400, depending on the model.

The price shouldn't worry most consumers, though.

Wireless carriers are adept at hiding sky-high prices in monthly device installment plans that are easier to swallow. Apple also finances its phones, allowing customers to pay off the full cost of a device over a year or more.

CNBC reached out to Apple for comment but a spokesperson was not immediately available.

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