With the iPhone 3GS discontinued as of the launch of the iPhone 5, one market watcher believes Apple has signaled that it does not intend to introduce a new, lower-priced iPhone model in the near future.
Charlie Wolf with Needham & Company said in a note to investors on Monday that he believes Apple should introduce an inexpensive iPhone model to address developing markets. But he doesn't think that will happen anytime soon.
Wolf believes Apple could have addressed prepaid markets by keeping the iPhone 3GS available at a lower price. Previously, the smartphone first released in 2009 was available for free with a two-year contract, but the iPhone 3GS was replaced by the iPhone 4 last month.
In the predominantly prepaid markets of developing countries, unlocked phones can start at prices as low as $150. Because prepaid markets are now growing faster than traditional postpaid markets like the U.S., Wolf said it's an "open question" whether the iPhone can continue to gain market share.
Earlier this year, China surpassed the U.S. and became the largest smartphone market in the world. Because China and other developing markets are predominantly prepaid, Wolf believes Apple has "little choice but to target prepaid markets in emerging regions."
Under a prepaid plan, the unsubsidized price of the iPhone 4, first released in 2010, is $450. At that price point, Wolf believes it will be difficult for Apple to gain considerable traction.
However, for the time being Apple can still increase its market share through greater carrier penetration, Wolf said. The biggest target is China Mobile, the largest carrier in the world with 688 million subscribers.
Apple has yet to ink a deal with China Mobile because the carrier's proprietary 3G network is not compatible with the iPhone. But China Mobile is in the process of building out a 4G LTE network that should be compatible with the 4G standard, which has led Wolf to believe "it's only a matter of time" before the iPhone debuts with China Mobile.
30 Comments
That's good news then. We can finally put that iPhone Mini rumor to rest.
That's good news then. We can finally put that iPhone Mini rumor to rest.
You mean iPhone nano. And that was dead in 2008. Why anyone ever thought they'd make a smaller or less capable "new" model of iPhone is beyond me.
Oh... really?
this deserves an article?
It is such a non-news worthy revelation it is crazy. Apple does have a budget phone- whatever the 2 previous models were. Why would they deviate from that strategy?
Apple doesn't produce budget/cheap versions of products. As soon as they start, you can bet that is a sign bad things are ahead for Apple. One reason I am convinced the iPad mini will be $299 or more, not the $199 that some believe. This is pure speculation based on previous history of Apple but for semi-proof...
Look at netbooks. Apple never produced a netbook during that craze and instead produced the Macbook Air. That kicked off the "ultrabook" craze that is now helping to revive PC sales, while netbooks are dead in the water.
Sticking to their guns and only producing high quality products is what keeps Apple customers loyal.
EDIT:
Besides, the way the lawsuits are going Apple can just make royalties on all the budget Android phones that are being produced and make money on budget phones without producing one themselves.
It is such a non-news worthy revelation it is crazy. Apple does have a budget phone- whatever the 2 previous models were. Why would they deviate from that strategy?
Apple doesn't produce budget/cheap versions of products. As soon as they start, you can bet that is a sign bad things are ahead for Apple. One reason I am convinced the iPad mini will be $299 or more, not the $199 that some believe. This is pure speculation based on previous history of Apple but for semi-proof...
Look at netbooks. Apple never produced a netbook during that craze and instead produced the Macbook Air. That kicked off the "ultrabook" craze that is now helping to revive PC sales, while netbooks are dead in the water.
Sticking to their guns and only producing high quality products is what keeps Apple customers loyal.
EDIT:
Besides, the way the lawsuits are going Apple can just make royalties on all the budget Android phones that are being produced and make money on budget phones without producing one themselves.
Apple makes insane profits on their products. They could still be very rich by selling their phones for less.
It seems they prefer to lose market share in developing countries and being overtaken by Android.