Is A $99 iPhone In The Works?
Could Apple be developing a cheaper iPhone? Reports have begun to circulate that the Cupertino, Calif. tech giant plans to offer a less-expensive version of the popular mobile device in order to take back market share lost to cheaper phones running Google’s Android software.
According to a Wall Street Journal report citing “people briefed on the matter,” it’s possible Apple may begin manufacturing the cheaper iPhone with a polycarbonate exterior that costs less than the aluminum used in current models sometime this year. Other parts of the new design, including the processor and graphics chips, could actually be derived from parts designed from older iPhone versions.
Historically, Apple has positioned itself as the gold standard in the mobile phone market and has not focused on the low-cost markets, instead relying on creating customer loyalty by boasting premium products. But in his current trip to China, Apple CEO Tim Cook stated he views China as the company’s second-most important geographic region globally—behind the US—in terms of potential revenue. Mobile users in the nation, however, have flocked to other smartphone brands such as Samsung and Lenovo that offer cheaper Android-operated phones.
Piper Jaffray analyst Gene Munster agrees that a less-expensive iPhone won’t hurt Apple’s profit margin if it attracts buyers who have never bought Apple devices and are not otherwise willing to purchase the higher-end phones. But, if the cheaper model instead attracts buyers who would otherwise have purchased the full-price iPhone version, a subpar iPhone could spell disaster for Apple’s profits.
“The Western markets are saturated and Apple has to look at emerging growth markets and develop a product that meets the demands of the region and affordability,” N. Venkat Venkatraman, chairman of the Information Systems Department at Boston University’s school of management, told the Associated Press.
Could Apple possibly reserve the cheaper iPhone for its emerging markets? Or will US customers soon have a choice between the premium model or one that doesn’t ding the bank account so drastically? According to Bloomberg, Apple has already spoken to at least one of the major US wireless carriers about plans for the model, which could cost between $99 and $149 and unlikely to launch until the end of 2013 “at the earliest.” Still, at the point most reports are based on speculation. Only time will tell.
[Image via 1000 Words/Shutterstock]
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