Thursday, January 10, 2013

Low-cost iPhone to be priced from $99 to $149: Report

More details emerged on the lower-cost iPhone rumors that have accelerated since the New Year began. The latest report comes from the Wall Street Journal on Wednesday, giving it a sense of veritas, and follows quickly the DigiTimes report from Tuesday.

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The earlier report posited a lower-cost iPhone with a larger screen, which goes against most of the other rumors on the device, which usually assume a smaller screen and dub the device the iPhone mini.

The WSJ report, though, was light on the details, stating that the iPhone could -- not would -- resemble a standard iPhone, but a different, less-expensive body. Costs could be lowered by using a shell made of polycarbonate plastic (the iPhone 5 currently has an aluminum housing which Apple's manufacturing partner Foxconn has called difficult to assemble).

Other parts could "remain the same," the report said, or be "recycled," meaning re-used from older iPhone models. We'd doubt that the parts would remain the same unless -- as in some older devices -- the cost of the parts came down significantly over time. Using an older part from an earlier device is possible; the iPad mini, for example, uses the A5 processor, which was used earlier in the iPad 2 and iPhone 4S.

The big reason for a lower-cost iPhone, whatever it is called, is to compete with the low-cost Android handsets that have gained traction globally. While Apple has the lion's share of the smartphone market in the U.S., globally, Samsung holds sway. Much of that is based on both cost and variety.

The lower-cost iPhone would be aimed at emerging markets and areas where unsubsidized devices are the primary handsets provided by carriers.

With such a target audience, price is a focus. While the WSJ report did not elaborate on a price, Bloomberg's later report did. That report said that Apple is mulling retail prices of between $99 and $149 for the device. It is unclear, though, if that price is subsidized or unsubsidized.

If subsidized, the device could be a real hit. If not, and the device still sells fully priced for $350 - $450, it's unclear how well it would do.

Time is another focus: the Bloomberg report added that the lower-cost iPhone would debut in late 2013, at the earliest, if it debuts at all. It could still cancel the project, which apparently was shelved earlier.

When Apple began holding over prior years' models to sell alongside the current version, it did so instead of selling a new, lower-cost model. Executives were concerned that a second iPhone would complicate its already complex manufacturing processes. That strategy, which continues today, didn't require designing new products.

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