Rumors about Apple‘s low-cost smartphone have been making the rounds since the beginning of 2013 and its seems more than likely that this is going to be something Apple will proceed with soon. Digitimes was the first to report on Apple’s ambitions of a cheaper iPhone. Subsequent reports from the The Wall Street Journal and Bloomberg gave the story legs and the lure of the massive Chinese market may be enough to draw Apple into taking the step. This will be a little out of line with Apple’s previously products because the California based firm does not create cheaper products and has always aimed at the higher end of the market by selling the highest quality products. A new report by Morgan Stanley analyst Katy Huberty claims that if Apple goes ahead with its low-cost iPhone it looks triple its market-share in the country. This is a significant jump for Apple who currently holds 10% of the quickly expanding Chinese smartphone market after the release of the iPhone 5. Huberty’s report has shined a light on the details of the Chinese smartphone market and what a cheap iPhone could do for Apple in the market. The report also shows the incredible potential of developing markets for Apple if it decides to make the low-cost smartphone.
It was popularly believed that prices in China were in flux but the report shows that they are actually becoming stable. This gives an $330 unlocked iPhone would not have any problems competing against other similarly priced devices from Lenovo, Huawei, ZTE and Coolpad.
Currently China Unicom and China Telecom off the iPhone 5 but if Apple lands a deal with China Mobile, Huberty believes that the Cupertino based firm will get a lot more sales in the country. A number of other analysts have similar thoughts but this can probably be only achieved if a low-priced iPhone is developed. Huberty states that, “[the] iPhone mini and a LTE license from the Chinese government this year or next could finally persuade China Mobile (CHL), with 700 million subscribers, to cut a deal with Apple.”
Investors have also been fretting over Apple’s gross margins and cannibalization of its own products customers if a low-cost device is introduced. Huberty dismisses these concerns by claiming that if Apple has a low gross margin of 40% and a 1/3 iPhone cannibalization rate the mini iPhone still adds incremental revenue and gross profit dollars.
For now the low-cost device has not been concerned but iLounge’s Jeremy Horwitz claims to have seen and held a prototype.
Source: iPhone Canada
TELUS Invests $4.5 Million to Introduce High Speed Internet and Optik TV Service to More Residences in Squamish
Dennis Tito Plans To Become First Private Space Tourist On Mars
Lunches So Good Kids Can’t Ignore Them
Invigorating Ginger Smoothie
The U.K.’s Youngest Parents Ever
The new hair Jennifer Lawrence