Apple Developing Low-Cost iPhone for Emerging Markets in 2013
A new year brings a new batch of low-cost iPhone rumors. News Tuesday from DigiTimes claims that Apple will introduce a low-cost iPhone for emerging markets in the second half of 2013, according to sources in the supply chain.
News of a low-cost iPhone option that would enable Apple to penetrate emerging markets has been circulating for years, with rumors of both pre-paid versions of older iPhone models as well as entirely new hardware circulating. Sources speaking with DigiTimes claim that the product will be a new design:
Some sources claimed that they have seen the sample of the low-cost iPhone, which will come with a larger display, meeting the prevailing trend for the adoption of 5-inch displays for high-end models. They added that the low-priced iPhone will also have a brand new exterior design.
Aside from price reductions on older models, Apple has long been hesitant to release a smaller or cheaper iPhone, but strong sales of the less expensive iPad mini have enticed the Cupertino company to reconsider its position, according to sources.
The launch of Qualcomm’s new low- and mid-range Snapdragon chipsets also give Apple a way to provide acceptable performance in a future iPhone without sacrificing the company’s margins. Apple’s current iDevices run on ARM-based chipsets.
Any new iPhone geared toward markets such as China would be good news for Apple. While the iPhone is now available on China Telecom and China Unicom, Apple has yet to ink a deal with state-run China Mobile, the world’s largest mobile carrier. A cheaper iPhone with limited features that met Chinese government censorship regulations, and a reduced subsidy requirement, may be enough for the two companies to reach an agreement.
DigiTimes has an sporadic record of accuracy in its tech reporting, often relying on “supply chain sources” that at times have been completely correct while just as often missing the mark entirely. Relatively little weight should therefore be placed on these rumors at this time. It is certain that Apple is trying to break into additional markets, and that it may offer China Mobile a cheaper existing iPhone model, but there is no evidence to support the rumor that the company would build entirely new hardware for these markets.
01-08-2013 08:26 AM
Apple Already In Carrier Talks Over Its Budget iPhone, Which Will Cost Around $99
Rumors surrounding an upcoming low-cost iPhone have really taken off this week, with The Wall Street Journal reporting on Tuesday that the device could make its debut before the end of 2013. Now Bloomberg is corroborating that with information from its own sources, who say Apple is already discussing the device with at least one of the major U.S. carriers. They also claim that the handset will cost between $99 and $149 when it launches.
Like The Journal, and indeed DigiTimes, Bloomberg reports that the budget iPhone will launch “as soon as this year,” according to sources familiar which Apple’s plans who chose not to be named. The device will be part of a push to attract customers in developing nations, but will also be made available in the U.S. and other developed markets.
Apple is said to be “weighing retail prices of $99 to $149 for a device that would debut in late 2013, at the earliest,” Bloomberg reports, and the company has already “spoken to at least one of the top U.S. wireless carriers about its plans.”
It’s thought that a more affordable iPhone from Apple will help the Cupertino keep up with rivals like Samsung and other Android smartphone vendors, who offer a range of devices, some of which are low-cost for budget-minded consumers. Samsung is already in front of Apple when it comes to smartphone market share, and it’s predicted that the Korean company will further increase its lead if Apple cannot cater to the lower end of the market.
However, introducing a budget iPhone would be a massive change of strategy for Apple, a company that has never catered to budget-conscious customers before. Its products have traditionally utilized premium materials and components, and indeed premium price tags. The closest we’ve got to a low-cost iPhone so far is a cut-price iPhone 4 and iPhone 3GS.
To make a cheaper iPhone, Apple would need to use cheaper parts and materials, and maybe make it smaller than existing models.
iPhone 3GS (2009) had a plastic enclosure.
Digitimes provides more details about the rumored cheaper iPhone that has been circulating. According to their supply chain sources, this new entry-level iPhone is said to adopt plastic for its chassis rather than the glass and aluminum that has been used on their current models.
They also cite other circulating rumors that suggest that the cheaper iPhone will alternatively offer a "chassis mixed with plastic and metal, with the internal metal parts being able to be seen from outside through special design".
The publication also reports that the components for the low-cost iPhone are going through validation and the final product may come to market in the second half of 2013.
Digitimes reignited the long-running rumors of a low-cost iPhone last week. The report was quickly followed by a Wall Street Journal and Reuters report claiming the same, and offering a target price of $99-$149. Subsequent comments by Apple marketing chief Phil Schiller seemed to suggest that Apple was dismissive of that possibility, but that article was later retracted by the original publication.
New purported details on upcoming cheaper iphone emerge
Rumors of a less expensive iPhone in development at Apple persist as new purported details surrounding the upcoming handset emerge. Citing multiple unnamed sources within Apple’s supply chain, Digitimes on Tuesday reports that Apple’s new entry-level handset will use a completely redesigned chassis. Rather than glass or metal, the report claims Apple’s new iPhone may utilize less expensive plastic chassis that could be supplied by a U.S.-based company. Digitimes also notes that “rumors are circulating” suggesting the new iPhone’s case will use a mix of metal and see-through plastic that would make some internal metal parts visible on the outside of the phone. The new cheaper iPhone is expected to launch some time in the second half of 2013.
Apple shares open below $500
Shares of Apple opened in the $400-range on Tuesday after losing more than half a point from Monday’s closing price of $501.75 in pre-market trading. The stock continued to fall Tuesday morning following earlier reports suggesting Apple recently halved iPhone 5 component orders in light of much weaker than expected demand moving into 2013. The reports were questionable at best, but the stock already had downward momentum that continued into Tuesday. Apple shares are down another 1.2% to $495.73 in Tuesday morning’s session.
Cheaper iphone estimated to shrivel apple’s margins, would risk ‘damaging its brand
Count Pacific Crest analyst Andy Hargreaves as being bearish on the potential of a cheaper iPhone. Per Barron’s, Hargreaves has written a note to investors warning of the potential long-term damage that Apple could do to itself if it decides to release a low-cost iPhone capable of selling well in emerging markets. While Hargreaves acknowledges the cheaper device could improve Apple’s overall smartphone sales volume, he estimates that Apple’s margins on the device would be just $70 per unit, a tiny sum compared to a gross margin of $295 per unit for the iPhone 5. The reason for these vastly lower margins, says Hargreaves, is that he doesn’t believe that “Apple could build a low-cost iPhone of reasonably acceptable quality for less than $180.”
Cheaper iphone reportedly on track for june launch, $250-$300 price tag
Ready or not, here comes the cheaper iPhone. In a note to investors on Monday, Topeka Capital Markets analyst Brian White said that his research has made him “confident that a lower-priced iPhone will be launched by Apple in 2013, possibly as early as June.” White says that the device, which is currently being called both the “iPhone mini” and the “iPhone Air,” will have “a $250 to $300 price point” that will be “58% below the $649 price point for an unlocked 16GB iPhone 5.” This low price will help Apple expand its smartphone market share in emerging markets such as China, White contends, while also acknowledging that the cheaper iPhone will deliver margins about “10 to 15 percentage points lower” than the standard iPhone model.
Budget iPhone rear shell leaked?
Could this be the rear case of the long-rumored low-cost iPhone? Tactus (via Macrumors) thinks so.
While Tactus doesn’t have a notable track-record in such leaks, the design does appear reasonably consistent with the majority of rumors so far. It’s a plastic shell, similar dimensions to the iPhone 4 but a little thicker as you’d expect with a polycarbonate casing.
Tactus also claims to have some details of the phone’s spec:
I’ve also heard on the grapevine that the alleged budget iPhone will have an A5 processor like the iPad Mini with a 32nm diecast. It’s also rumoured it will have a 3.5 inch retina screen, much like the 4S, but not as big as the iPhone 5 … I’ve also discovered the factory producing this secretive project have confirmed the device will be available in Black, White, Blue, Red and Yellow
Budget iPhone leaked with price and release date?
A photo of Apple’s alleged budget iPhone with a plastic case has been leaked online along with a release date and price.
The image shows what could be the polycarbonate plastic shell of the rumoured budget iPhone. Leaked by Tactus, the site says it might be the real deal but isn’t making any solid claims.
However, the site is stating the device will get a release date of 15 October and a price of £229-£249 ($340-$369).
Unfortunately, there’s no way of deciphering whether this is the unannounced budget iPhone or not. If it is, Tactus says the smartphone will be around 62 x 120mm, which is bigger than the iPhone 4S. It will supposedly be 9mm thick and come in black, white, blue, red and yellow, much like Nokia’s Lumia range of handsets.
The leaked image goes against suggestions that the plastic casing will be translucent like Apple’s iMac G3.
Design-wise it looks similar to Apple’s white MacBook laptop but this supposed iPhone case could just be a regular case with some intricate iPhone and Apple details added on. One commenter even suggests it is a MacBook with holes drilled into it.
Whether Apple will launch a cheaper plastic version of the iPhone is up in the air. It certainly goes against the firm’s premium product ethos.
However, with more and more affordable options on the market, mostly running Android, it could well be a hit with those wanting to own an iPhone, but without deep enough pockets to afford one.
Rumored specifications for the budget iPhone include an A5 processor and a 5Mp camera.
Budget iPhone “Confirmed” For This Year, Says Leaker Of Previous iPhone Components
Last year, electronics supply company ETrade Supply lucked out and was one of the first companies to obtain parts of the iPhone 5S before release: first the FaceTime cam, then the front panel and then the back panel.
Whatever ETrade Supply’s sources, then, they clearly have a solid connection inside Foxconn. And now that source is telling them that the ‘budget’ iPhone is a very real product.
Sadly, there’s not much more to go on: a leaked part or something would be helpful here to prove veracity. Still, given ETrade’s history, their claim that they have heard an “on the wind confirmation” that Apple will be releasing lower end models this year.
We already have a pretty good idea of what Apple’s “budget” iPhone will look like: a plastic affair that looks like an iPhone 5 in front, and an iPod touch in the back. We also know that it would be a good move for Apple to release one, since recently, J.P. Morgan said that a lower-cost iPhone would effectively kill Samsung’s Galaxy business in the United States.
The biggest question about the ‘budget’ iPhone is really whether it will be a budget device, or a mid-range device. There’s good reason to think that the so called ‘budget’ iPhone will be priced closer to the iPad mini than an iPod nano, but only time will tell.
But where there’s smoke, there’s usually fire, and there’s getting to be too much smoke and too many people shouting “Budget iPhone!” as they rush around the theater right now to ignore. The iPhone is about to become a family of devices at different price points. It’s just a matter of time.
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