Perhaps Apple’s ‘low-end’ iPhone is really a mid-level iPhone

“What if Apple’s long-rumored low-end iPhone isn’t targeted at the smartphone market’s lower reaches? What if it’s targeted at the middle?” John Paczkowski asks for AllThingsD. “What if it isn’t low-end at all, but simply mainstream? Not a $150 phone or even a $200 one, but a $350 one? A ‘mid-end’ iPhone?”

“That’s the theory put forth by Gokul Hariharan and Mark Moskowitz over at J.P. Morgan, and it’s a pretty compelling one, with strong historical precedents [iPad mini, iPod nano],” Paczkowski reports. “In each case, Apple sacrificed a portion of its typically high margins to field a high-end product with enough mainstream aspirational appeal to expand its market share.”

Read more in the full article here.

MacDailyNews Take: As we wrote back on January 9th: “You can bet that if Apple enters the pre-paid phone market in emerging markets, they most certainly will have margins and they will make a profit on each device sold.”

Related articles:
Apple’s Phil Schiller: Cheap iPhone will ‘never be the future of Apple products’ – January 10, 2013
Bloomberg: Apple developing cheaper, smaller iPhone for 2013 holiday release – January 9, 2013
WSJ: Apple prepping less-expensive iPhone – January 8, 2013
Apple to launch low-cost iPhone with 5-inch display for emerging markets in 2H13, sources say – January 8, 2013
Barclays: Cheaper iPhone for emerging markets ‘key’ for Apple – December 4, 2012

21 Comments

  1. People, Apple’s low end iPhone is the iPhone 4, the mid is the iPhonr 4S and the current is the iPhone 5.
    At what point will you get this and accept this. A low end iPhone is NONSENSE! Apple doesn’t move backwards!!
    Apple doesn’t cheapen their lineup. When the 5S is out, then the 4S will be the low end. DUH!

    1. If they keep the 4 as well as the 4S this could put them in the cheeper markets as well. A 4 would be great for the per-pay market. It would not require any R&D, retooling, new packaging, or new apps. It would keep a consistent look. No Siri would be less taxing on their servers, and is a waste in places that don’t speak Siri supported languages.

  2. To me a lower cost iPhone always mean a mid-range phone. And I still say it would be the smartest thing Apple could do right now and will sell tons. Me personally, I would rather have a durable plastic iPhone as my daily phone than the 5.

  3. With a new upscale OS on the new iPhone5s with Sapphire screen and Aluminum body… there will be no need for a mid-level phone. Because people will see the value in a better made device and a OS that matches the phones styling.

  4. Even if this is true, and I think it could be, this new iPhone model will cost even less to manufacture in year two, and the price will be reduced even further at that time, with the lowest-end version remaining on the matket at an even lower price point. This is the way Apple has expanded all its other product lines and I expect the company to stay this course.

    1. Agreed. Apple knows what it’s doing. Release a high-end model, sell past generations as a medium-level model. Design an all-new, marketable midrange model, sell previous generations as low-end models. Maintain healthy margins all the while. And that is why Apple will succeed, whereas everyone else in their race to the bottom will continue to lose money no matter how much they sell.

  5. Also, by adding a second, mid-range model, Apple could go after more market share AND add more features to shift the current product line to be the “iPhone Pro” for business.

    I’d buy a model with 256GB of storage in a heartbeat, and welcome a 12-megapixel or better camera, a 4.5-inch screen, bigger battery, etc.. But a mass market model doesn’t really need such a large display or 12-megapixel camera.

    This plan would help raise Apple’s margins back to the desired levels and be a formula for the iPad business as well.

  6. We all know Apple doesn’t do anything “low end”.

    The more important point is, what’s taking so long to offer a family of iPhones? Cook is _WAY_ too slow in expanding the lineup, as the market share decline of iOS under his tenure has shown. And yes, in the long run, market share DOES matter. Cook needs to stop the erosion of iOS with more than just software updates. A diverse planet needs diverse hardware.

    1. What don’t you understand? Apple has a ‘family’ of iPhones. The 5, 4s, and 4 This was started under the reign of St. Jobs, so don’t go bitchin about cook.

      The multi model with confusing number system almost killed Apple in the 90s, they don’t need to repeat that mistake. Apple doesn’t need to falsify its offerings like other manufactures who have 15 different ‘models’ every 4 months that are only different covers over a similar chassis with a new logo on the splash screen. 3 phones is a great lineup, and keeps production costs in line, its very effective and efficient.

      If they were to further expand the line I do like HD Boy’s 256 GB, better internals and etc idea.

      1. This year’s iPhone model and two older models from past years do not constitute a family.

        See the iPod or the MacBook: multiple up-to-date hardware options with noticeably different capabilities and styling are absolutely necessary. Nobody is asking for 15 models. Just offer small, medium, and large. Or offer the base model and a “Pro” model. ANYTHING to recover ground lost to Samsung, which in case you and Cook haven’t been paying attention, is growing significantly faster than Apple despite an inferior OS and inferior app store. Hardware options matter!

  7. Why would Apple spend millions to develop, test, and produce a new plastic low end iPhone, when they are already producing the 4, 4S, and the 5? A low end iPhone is not distinguishable from the other phones like the nano is compared to the Touch or shuffle.
    It would become Epson printers…the 5200 B4S 2000 does what compared to the 5300 GHT 3290?
    Apple should spend its R&D on reinventing Google Glass.

  8. I don’t understand what these analysts aren’t getting.

    High end: iPhone 5
    Mid end: iPhone 4S (Cheap iPhone)
    Low end: iPhone 4 (Cheaper iPhone)

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