“A low-cost iPhone is awaiting approval at Apple, and could be launched in 2013, according to new reports,” Ashleigh Allsopp reports for Macworld UK.
“Jefferies analyst Peter Misek said in a research note on Monday that the cheaper iPhone could be offered at a $200 to $250 price point unsubsidised,” Allsopp reports, “which could translate to around £200 here in the UK.”
Allsopp reports, “Misek says that the low-cost iPhone is just waiting to be given the green light by Apple.”
Read more in the full article here.
MacDailyNews Take: What do you think, is it time for Apple to move downmarket?
Yes.
Apple has already moved “downmarket ” with the zero upfront cost (with a contract) of the iPhone 4.
The iPhone 4 represents 2 year old technology, and if breakdown firms are accurate has ~50% gross margins. That means Apple’ cost to make one is ~$240. Retooling will only add cost to such a ‘low cost’ unit.
With a PT of $250 where does Apple profit from addressing the bottom feeder market?
Using sales from iTunes might be one way to profit with a ‘no profit’ handset, except for two things: bottom feeders don’t buy anything, and such a business model doesn’t fit with Apple’s DNA (hasn’t done well with Amazon either).
Apple is not looking to address the low priced spread, rather they are going to continue to produce handsets that everybody wants. For sure Apple isn’t interested in unit market share, they are #2 worldwide, with #1 share in profits. Profits people, that’s where it’s at at, it’s what makes it possible for Apple to produce what they do.
No!! No!! No!!
I think Tim should ask himself “what would Steve do?”
Or not…
NO!
NO. As Steve told Tim, “don’t ask what would I do, rather do what’s right”.
…as long as they make a profit
‘THEY make a profit’ but they will dilute the other lines and Apple will join the other companies in the race to the bottom with the focus on market share rather than profits.
Dell still makes a profit but . . .
Make an iPhone for those who can’t afford one? Why not? Lower resolution display, less memory, no 3-D maps, same fit and finish. Sounds like a winner.
And of course BMW should make a line of scooters for the poor too. That wouldn’t knock the prestige of owning their top models, right?
yea they make a profit…
the tech inside an iPhone 4 (even with a few updates), would be cheaper to make than in iPhone 5… and the components should be cheaper as well…
Just put the latest cpu into the iPod 4S body and of course use the smaller Lighting connector.
1. Not everyone wants or needs the latest “widescreen” iPhone.
2. Apple wants the Lightning connector on as many devices as possible.
3. In six months Apple really shouldn’t be selling any gizmos with the old iPod connector.
Maybe as soon as TSMC is online and Apple wants the ding Samsung. Although, this maybe for the emerging markets where Apple’s price point is higher and expand the Eco system. That would hurt Samsung more as the iPhone and Apps would expand into markets that are now safe. Even cutting profit and production.
Green light that phone in Asia, Central / south America, and Europe.
Apple will not hurt its sales of the premium models by doing so … The only one to suffer will be Samsung as there will be no reason to settle for a knockoff when the real thing is available at the same price… Albeit an older model … But I would buy a brand new last years model BMW at the same price as this years new Suzuki …
Yea!!!!!
The iPhone 4 is free right now on Verizon and is a fully functioning phone.
How would this “low-cost” phone be any different?
It’s not free. It’s subsidised. It actually costs something like $400, which is paid through the monthly contract bill. It’s a mortgage.
Yes and a subsidy free phone would have much cheaper monthly plans no matter where you live of course. This seems to be the inexpensive “China phone” everyone thinks Apple should market there.
unsubsidized. If that was a subsidized price, it would be more expensive than current iPhone 4S prices.
Thanks for explaining what subsidized means, except it is totally different than a mortgage.
It can be spelled with a z or an s. Look it up. And no, I wasn’t suggesting that it is literally a mortgage. Just the same basic idea- you don’t own the property in question, until you’ ve completely paid for it. And the 4 is that much. The 4s is still 500 and the 5 even higher.
This is an unsubsidized price. No contract. Buy the phone and take to whatever carrier you want without a contract. Big difference.
It’s free in America and some other countries where buying on contract is the norm, but there is a bit more world beyond the US and in many countries, the customer buys the phone outright and then pays for usage as they use it.
For the pay as you go sector, the cost of buying an Apple phone outright is pretty high, but that market is huge. If Apple can find a way to sell a phone profitably in that market, it will do very well.
Such a phone wouldn’t cannibalise Apple’s market because Apple is much less prominent in PAYG operations, it would simply mean additional customers for Apple who would otherwise have bought from rivals.
The hammer cometh
Nailed it
A good way to introduce new people to the whole ecosystem when they would probably not see it otherwise. Next, as finances permit, it would be a current iPhone, then an iPad, the an iMac. I’ve seen it happen many times.
A big NO for me. One sale of a low cost iPhone is one lost sale of a regular iPhone. Its not like people arent willing o pony up. We lose our luxury status in other parts of the world, our premier branding. Most of all we lose our profits. It’s about profit per handset not market share, remember folks?
All Tim Cook needs to worry about is cranking enough regular iPhones to meet the demand, not create a new product category.
“We make tools for these kinds of people.
While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”
Getting better tech into the hands of more people only makes things better. (:
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Would be good for emerging markets in India, South Asia, Africa, Latin America
I don’t think it will cut into higher end iPhone sales too much. 1) people on family plans don’t benefit as much from switching to no-contact plans 2) most Americans are too stupid to realize they could save anyway so they won’t understand why people are “paying the same for a cheaper phone. 3) People want to latest, faster, most storage even when they don’t need it just for atatus. 4) I’m still rockin my unlocked 3gs and will for some time to come. A $200 unlocked option might make me upgrade more often.
iPhone 3GS with face lift or new skin will do it, emerging markets
mostly run on 2G or 3G speeds anyway.
“MacDailyNews Take: What do you think, is it time for Apple to move downmarket?”
This is not the PC market. There MS dominated and still does and even successfully prevented IBM’s OS2 OS from establishing itself. Linux is fragmented and a new contender on the horizon is the Chrome OS. Apple is more than holding its own but, price sells.
The smart phone market Apple created is and will continue experiencing real threats from recent OS upgrades from MS, Android and the world waits to see RIM’s new OS. Just ask Google why they can’t keep the Nexus 4 in stock more than 5 minutes at a time. Apple will have to adjust “something” to compete or it will find itself playing catch up.
Apple started in the PC business with the Mac Plus and SE’s and later added the more power desktops. In the music arena they started with the iPod and later introduced smaller less expensive models. That is referred to as adjusting to market demands.
Wrong! Apple started its PC business with the Apple ][. For many years its capability exceeded the Macintosh. Apple used its lower priced entry points as a cash cow to fund Mac development. What purpose would funds from a lower priced iPhone provide, other than to reduce the company’s profit margin? This is not a direction that Apple should take at all!
Yes. To deny Samsung and Android this “trailing edge” market and the mefia attention it gets. Many people seem not to care much about chip speed and performance: all they really want is a cheap yet modern phone. If capacity exists, Apple should sell these, while it marches forward at the cutting edge for the discerning mobile user. I petsonally have no problem with Apple dominating the entire smartphone sector. 🙂
Apple has a lower cost iPhone, t’s the iPhone 4S $99
The 4S starts at $550, unlocked. Buying on contract puts the other $450 on a two year credit card payment schedule.
Could be sold in emerging markets, particularly China.However, if based on the iPhone 4, it would be different enough from the current and coming iPhone 5S, that it would not compete against them even in the US. I support the idea as long as it has excellent build quality and can run current iOS (minus certain features) versions.
is it going to be a better product where apple can make a significant contribution or is it just competing with muck dwellers and idea infringers? They already have cut price phones – they are called previous models.
I wish Apple had a broader range of smartphones. There is such a huge variety of smartphones on the market and basically just one iPhone, although in multiple generations. Even the iPod is available in four distinctive models.
My current 10 year old phone makes calls, sends text and with the addition of an attachment takes very grainy photos.
I would have purchased a Apple iPhone a long time ago had Apple came out with a version of the iPhone that offered Apple’s quality build and style, touch functionality with basics that one could use and not have to pay 650.00 for base model and then an $80.00/mo. smart data plan.
I would have been more than happy to pay $300.00 for a dumbed down version of the iPhone that did calls, texts and takes good pictures and has the quality of an Apple product with the touch functionality and the ease of use contacts, address book, vvm and that’s about it, and would allow me to keep a lower tiered minutes only plan from the Telcos.
Try craigslist for a 3G. Stick in a prepaid SIM. Enjoy.
This would be the MetroPCS, Virgin Mobile, T-Mobile, and like, unlocked pay-as-you-go phone. In some markets (India, China, …) this is the norm for phone buying.
No. Not- in- their DNA.
ANAL-yst! Who else can make such ridiculous predictions.