Kasper Jade
After discovering several unreleased iPhone prototypes through its research back in December, analysts at the investment research firm Topeka Capital are raising their convictions this week that Apple is gearing up to introduce one of these models at a much lower price point around mid year.
"In late December, our research uncovered iPhones in different screen sizes for potential launch in May/June, allowing Apple to better bifurcate the market and pave the way for a lower-priced iPhone," analyst Brian White told clients in a research note Monday.
The analyst went on to say that he believes June would serve as the earliest point of entry for the device, which could be brought to market under names such as "iPhone mini" or "iPhone Air" given the prototypes' lighter weight due them being wrapped in plastic enclosures.
"We believe a $250 to $300 price point for a lower-priced iPhone would make sense and 58% below the $649 price point for an unlocked 16GB iPhone 5," White said. "A $250-$300 price range would also be competitive with China-based Xiaomi that offers a high-end phone experience at a mid- range price of ~$320 in Chinas."
Even with a gross margin estimated at 10 to 15 percentage points lower than existing iPhone models, the analyst believes the device's expected $250-to-$300 price point will allow Apple to significantly expand its reach in the smartphone market and broaden inroads in China, while also opening up opportunities in other BRIC countries such as Brazil, Russia, and India, where growth potential stands at its highest.
For example, we estimate that Apple was unable to address at least 60% of the smartphone market in 2012 (not to mention the feature phone market) due to the high price point of the iPhone, while we believe a high percentage of the annual smartphone unit growth of 688 million between 2012 and 2016 units (i.e., from 717.5 million to 1.4 billion) as estimated by IDC, will be outside of the high end market.
As for how Apple plans to shave down the retail price of this so-called lower-cost iPhone, White believes the device will adopt a more cost affordable display, case, memory, wireless, camera and processor.
"The case would be an interesting area of cost savings with a lower priced material (e.g., plastic) versus the aluminum unibody casing on the iPhone 5, while adding colors to excite consumers," he said.
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112 Comments
The success of the iPad mini could be pushing them in this direction.
Very interesting....but Apple has never really approached the lower end of the market. This would be a huge change of strategy for them. We will see......
As for how Apple plans to shave down the retail price of this so-called lower-cost iPhone, White believes the device will adopt a more cost affordable display, case, memory, wireless, camera and processor.
"The case would be an interesting area of cost savings with a lower priced material (e.g., plastic) versus the aluminum unibody casing on the iPhone 5, while adding colors to excite consumers," he said.
Is he talking about basically the iPhone 3Gs with updated internals and lighter weight? I'd love to see the return of the more comfortable, ergonomic design. The chamfered corners softens the previously hard/cold feel of the iP4, in the 5, but it's still feels cold and uncomfortable to hold for being one of the most personally intimate devices Apple sells.
Of course, anything is possible. But I just don't see Apple compromise on their high standards. A cheaper screen has been used on the iPod touch, but this line seems out of line: [I]As for how Apple plans to shave down the retail price of this so-called lower-cost iPhone, White believes the device will adopt a more cost affordable display, case, memory, wireless, camera and processor. [/I] I really can't see Apple skim on the current 'iPhone experience'. And will they save $$ with a cheaper camera? The darn thing costs a mere $18. So now what, they're gonna save a buck - or 10 - on this item, another 5 there, another 10 there? It doesn't look like they could half the MSRP with cheaper parts. But if they do, it might become: iPhone S (3") $299 iPhone M (4") $499 iPhone L (5") $649 I'll just call the cheapest one the iPhone/s
Very interesting....but Apple has never really approached the lower end of the market. This would be a huge change of strategy for them. We will see......
iPod Nano? iPod Shuffle? Mac Mini? Those are all targeted at the lower end of the market. Just Apple's take on the lower end. and that's only looking at Current generation models that are for sale.