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  • Apple Readying New Cheap 8GB iPhone 4



    According to Reuters Apple is readying a cheaper 8GB iPhone 4 to deploy in growing markets.

    The move is an effort to increase or maintain the enormous growth Apple has experienced in the mobile field by taking advantage of growing markets in China and other developing nations. The Apple market space has always entailed high-margin, high-priced electronic devices. These cheaper iPhone 4s may sacrifice a small portion of Apple's high profit margins in order to gain market share in these emerging markets.

    A lower-priced version of iPhone 4 seems to be a necessary evil at this point in the iPhone adoption cycle, especially in emerging markets where the average income of individuals is much lower. - Channing SMith, co-manager of Capital Advisors Growth Fund.
    Other market analysts echo the same sentiment that Apple "needs" to produce a cheaper iPhone to compete with the likes of Nokia and other phone manufacturers who produce cheaper products. Apple's Chief Operating Officer Tim Cook recognizes the growth potential in China, but whether Apple must sacrifice their love affair with high profit margins in order to gain a foothold in China and other markets has yet to be seen.

    While the analysts are right in predicting that Apple will need a cheaper device to lure less affluent buyers in these markets, saying that it could have an adverse effect on profit margins ignores Apple's purchasing power and commitment to profit margins. Apple, if they do produce a cheaper iPhone 4, wont do so until the iPhone 5 comes out, allowing the latest and greatest technology to continue to be sold at a premium. Second, the smaller capacity means cheaper memory components, and Apple's purchasing power means cheaper prices of all other components. Also, the fact that all of the iPhone 4s components are already readily available will make the device even cheaper to produce as factories have already been pumping out millions of iPhone 4s over the last year and a half.

    All of this equates to a cheaper iPhone 4, capable of everything its more expensive, brethren are. More importantly the cost of producing this unit has been driven down enough that Apple can sell it at a perceived "cheap" price, and still maintain their industry leading profit margins.

    Source: Reuters
    This article was originally published in forum thread: Apple Readying New Cheap 8gb iPhone 4 started by Phillip Swanson View original post
    Comments 7 Comments
    1. feidhlim1986's Avatar
      feidhlim1986 -
      Not gonna happen.

      Probably the same people who said Apple "needs" to produce cheaper Macs. Look at Apple now, rolling in money.
    1. Orby's Avatar
      Orby -
      Quote Originally Posted by feidhlim1986 View Post
      Not gonna happen.

      Probably the same people who said Apple "needs" to produce cheaper Macs. Look at Apple now, rolling in money.
      Conversely, I think it's as good as done.

      The 3GS (8 GB) is the number-two handset by sales is the US--at $49 USD. It makes all kinds of sense for Apple to switch from the 3GS to the 4 as the "backup" when the 5 hits the market, like the switch from the 3G to the 3GS for the secondary model when the 4 launched. They'd be gutting their own sales if they didn't.
    1. Carvensno's Avatar
      Carvensno -
      Just cant see myself paying 49.99 for the phone and getting locked into a 2 yrs contract The price isnt bad! Just that 2yr contract deal, maybe a 1yr wouldnt be to bad but damn 2yrs???
    1. Poseidon79's Avatar
      Poseidon79 -
      Apple doesn't "need" to do anything considering they rake in 66% of all mobile profits. Unless they can continue to make a /substantial/ profit they won't produce a product. Apple doesn't want to compete in the low end phone market. I could see them selling an 8GB iPhone 4 for $99 or maybe $129.
    1. sziklassy's Avatar
      sziklassy -
      Quote Originally Posted by feidhlim1986 View Post
      Not gonna happen.

      Probably the same people who said Apple "needs" to produce cheaper Macs. Look at Apple now, rolling in money.
      They certainly aren't rolling in money due to mac sales. Had they not come up with the ipod/iPhone line they may very well have needed to produce cheaper macs to stay afloat.
    1. mmaboi21's Avatar
      mmaboi21 -
      It's a bit hard for me to see this happening although it makes perfect sense...

      I can understand apple wanting to keep the i4 sales up by making a "cheaper" version when the 5 drops but then what about the 3GS? If it's the # 2 mobile handset then they would have to sell the i4 around 100 bucks(2yr contract) and the 3GS stays the same for the price to be justifiable. So itd be hard to spend 50 bucks for the 3GS When you can spend just 50 more bucks and you have a much better phone. More ram, FaceTime, sleek new design, higher res cam, etc;It's definitely going to be interesting what apple does because I know they don't want to get rid of the 3GS if it's the #2 mobile handset.
    1. DaLsim's Avatar
      DaLsim -
      Quote Originally Posted by Poseidon79 View Post
      Apple doesn't "need" to do anything considering they rake in 66% of all mobile profits. Unless they can continue to make a /substantial/ profit they won't produce a product. Apple doesn't want to compete in the low end phone market. I could see them selling an 8GB iPhone 4 for $99 or maybe $129.
      My guest is crapple made too much (I)sh.t that they R will sell it at all cause,But make it a good 1 so people can sign their life N $$$ to them