After months of speculation and rumors, Apple finally confirmed the iPhone X at its launch event Tuesday. While the iPhone X includes upscale features not seen on past iPhones — new additions include its Super Retina display and Face ID — it’s also coming with a similarly new price tag: the iPhone X will retail for $999.

The iPhone X’s deluxe price point is going to be a hefty jump compared to past iPhone releases, as most have been priced off-contract at around $600 to $700 and the iPhone 7 Plus previously had a starting price of $769. Within Apple’s own product lineup, you could even get a MacBook Air for the same price or an iMac for only $100 more.

But is the iPhone X overpriced? When it comes to the phone’s actual features, it’s trickier to say. Like with past iPhones on the tick-toc update cycle, Apple saved many of its bigger upgrades for the iPhone X and features like its redesigned front-facing camera setup require newer hardware within the phone that add up for the phone’s total cost. In particular, the iPhone’s expanded OLED display has been a potential culprit for the price hike, as KGI Securities analyst Ming-Chi Kuo estimated that it costs Apple $120 to $130 per screen versus $45 to $55 for the iPhone 7 Plus’ 5.5-inch display.

Plus, Apple’s not the first company that’s hit the $1,000 threshold for a smartphone. Samsung’s recently released Note 8 starts at $960, although its Galaxy S8 and S8+ retail for a relatively more affordable $756 to $840. For both companies, the $1,000 price point also reflects an increasingly willingness to position their smartphones as luxury products and so far, consumers haven’t had any issues with this pivot. As the failure of premium smartphone manufacturer Vertu illustrated, most luxury buyers are fine with Apple or Samsung, as they’re popular, well-built and signal that you can afford to drop significant cash on a phone.

IDC: Smartphone Vendor Market Share Chart

Shoppers who aren’t willing to pay that much for a new phone still have options, as companies aren’t going to abandon them entirely. Apple is still offering a mid-range product lineup with the iPhone 8, even if — as the iPhone X’s emphasis on features Apple says are the smartphone’s future shows — it’s going to be a de facto bridge release to Apple’s full-screen, buttonless future. The popularity of payment plans among carriers and Apple’s iPhone Upgrade Program also helps to reduce the initial sticker shock for a new phone, even if it doesn’t bring the actual price down — paying $40 per month over two years is a lot easier than paying $999 all at once.

But practically, $1,000 now being the new normal for the latest smartphones means a few things. For many shoppers, it’s likely that annual smartphones upgrades will be extended into biannual or longer cycles. As smartphone companies become more comfortable with keeping the newest features on their highest-end phones before rolling them out to more affordable releases later, expect buyers who don’t want to break the bank on a new phone to hold onto their current model for longer and wait for phones with major updates or spring for a leasing program.

And even if you think the idea of the $1,000 smartphone is ridiculous, the ever-growing smartphone market means that there’s still a sizable number of people who don’t. As long as those buyers are willing to pay for these phones, expect companies like Samsung and Apple to continue to target them.