Chart: Why iPhone Average Selling Price Estimates Need To Move Higher

If Apple Inc. APPL's newest iPhone doesn't see a price increase, the blended iPhone average selling price is still expected to grow, according to a new report from Bank of America.

“We see that even if there is no further price increase for the phones to be released in C18 and C19, blended iPhone ASP in C19 would be higher given the step up from C17 would flow through to 2019,” said Bank of America analyst Wamsi Mohan.

Related: Sacconaghi: Google Is Paying Apple $3 Billion A Year To Remain iPhone's Search Engine

Every $50 higher ASP for the iPhone 8 would add an additional 60-cent EPS in C2018, Mohan said. Bank of America is modeling Apple's C2018 revenue at $277 billion, with EPS expected to be $11.16.

According to Mohan, the base case assumption for the average selling price of the iPhone 8 is $894. Like in years past, Bank of America expects that Apple will lower prices of existing phones by $100 when the new phones are released.

The step up expected in price in 2017 could generate a two-year runway for ASP to increase and is underappreciated, leading Bank of America to reiterate its Buy rating on Apple and maintain a $180 price rating.