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  5. Cheap iPhone for emerging markets rumours get fresh legs

Cheap iPhone for emerging markets rumours get fresh legs

Cheap iPhone for emerging markets rumours get fresh legs

Talk of a low-cost iPhone aimed at the burgeoning Chinese and Indian markets got a new lease of life today, after another analyst outlined the business case for the handset.

Rumours that Apple is planning a cheaper iPhone, which would purportedly recycle parts from earlier models and be more compact than the current-gen edition, have been rife for years.

However, with no sign of the phone and previously rife speculation on tech sites drying up, it had begun to seem increasingly unlikely that the handset would ever happen.

But in a note to investors today analyst Ben A Reitzes of Barclays Equity Research claims that, in fact, the case for the kit informally dubbed the iPhone Mini is stronger than ever, amid surging growth for Android in China, in turn fuelled by affordable handsets powered by Google’s OS.

He stated: "We recognize that a key test of Apple's long-term model will be whether the company can capture the growth associated with a new wave of emerging market consumers who could enter the smartphone market through low priced Android devices.

"In our opinion, Apple can benefit from those upgrading to higher end smart phones later on but the company also needs to make sure it can 'hook' customers into the Apple ecosystem early enough in the upgrade cycle to prevent more customers from developing loyalty to Android."

According to Reitz, the low cost iPhone is most likely to land next year or the year after, with assembly and parts coming in at under $150 to allow Apple to price it as an eminently affordable pay as you go phone.

"We imagine an iPhone at a low price point to capture the initial smartphone purchase from customers upgrading from feature phones — pushing new customers into the Apple ecosystem.

“We believe Apple can sell a phone with an inexpensive casing for emerging markets and a (bill of materials) below $150,” he wrote.

If earlier reports can be believed, areas where Apple is likely to make savings to keep the cost of the handset down include the processor, with the older A4 or A5 processor standing in for the newest chipset, and the screen, which is expected to be a much lower-res variety than the Retina display that graces the iPhone 5.

Source:

Apple Insider

Category: News

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