Gene Munster: Time Has Come for Cheaper iPhone

[Michael Essany]

It's the suggestion of many and now the prediction of one very prominent Apple watcher and market analyst. According to a research note published Monday for investors, Piper Jaffray's Apple news and research guru Gene Munster speculated about what Apple may be forced to do next year given the increased competition from cheaper smartphones in the mobile space.

"We believe the delta between smartphone market growth and iPhone growth will push Apple to release a lower priced device despite comments to the contrary," Munster said this morning. "Looking back historically, Apple always priced Macs as the higher end of the market and ultimately the iPad, and now the iPad mini, became the 'Mac for the masses.'"

According to Munster, a cheaper entry-level iPhone is critical for one very pressing reason - Android phones are getting hot and they aren't going anywhere. Even if some folks want an iPhone, the general quality and affordability of Android phones may be enough to keep consumers on the financial fence away from Apple territory.

Munster says Apple may very well release a dirt cheap iPhone (at least when compared to the cost of a fully-equipped new model) that will be possible by plucking several nice but non-essential features from the high end models, like Retina display. And while Munster is aware of how low-price, contract-free iPhones have been rumored about since the first model arrived in 2007, the analyst thinks 2013 may the year when this longstanding rumor may finally become a reality.

Source: Barron's

[claustin]

The iPhone 4S is $99 and the 4 is free on contract. Can't get cheaper than free. In one more generation when the 4 is gone then the free iPhone will be the 4S, and it'll have the turn by turn directions and great camera and everything. I don't think Apple needs to have a "cheaper" iPhone. They already have cheap iPhones. What they need are colors and different screen sizes. They make different sized Macs, iPads, Displays, why is the iPhone different? I just find it odd that they know that different consumers want different sizes in all these other products, yet they keep sticking to this "optimal" size for the iPhone. They need to have the 4S size, the 5 size, and they need to release a version with a GSIII or Razr Maxx screen size (WIDER!) as well. I'd buy that in a heartbeat. Not to mention the battery gains they'd get from the larger form factor, like the Razr Maxx HD. I had to use one of those for a month, and the screen size and battery life blew me away. Not enough that I'd continue suffering Android, but the hardware was legit. Sign me up for an iPhone Max in red. Thanks Tim!

[cmay227]

The iPhone 4S is $99 and the 4 is free on contract. Can't get cheaper than free. In one more generation when the 4 is gone then the free iPhone will be the 4S, and it'll have the turn by turn directions and great camera and everything. I don't think Apple needs to have a "cheaper" iPhone. They already have cheap iPhones. What they need are colors and different screen sizes. They make different sized Macs, iPads, Displays, why is the iPhone different? I just find it odd that they know that different consumers want different sizes in all these other products, yet they keep sticking to this "optimal" size for the iPhone. They need to have the 4S size, the 5 size, and they need to release a version with a GSIII or Razr Maxx screen size (WIDER!) as well. I'd buy that in a heartbeat. Not to mention the battery gains they'd get from the larger form factor, like the Razr Maxx HD. I had to use one of those for a month, and the screen size and battery life blew me away. Not enough that I'd continue suffering Android, but the hardware was legit. Sign me up for an iPhone Max in red. Thanks Tim!

Guess you like being in jail. iphones have lost their cool. That why android is doing better. No so cool when everyone has one huh?

[vinaygoel2000]

Guess you like being in jail. iphones have lost their cool. That why android is doing better. No so cool when everyone has one huh?

Nobody likes to be in jail but the only few things I miss (being non-jailbroken on iPhone 5) are NCSettings, PDANet and Facebreak. Two out of those three are illegal (per AT&T) anyway so really the only thing I miss is NCSettings.

[stevelucky]

Guess you like being in jail. iphones have lost their cool. That why android is doing better. No so cool when everyone has one huh?

What a great way of following up a really insightful comment with a really ridiculous one.

[mustard05]

Gene "Mustard" is full of it. Any article based on anything he says follows suit. Why would Apple release a cheaper phone? They need to make a bigger phone if anything. Sorry if all that sounded negative. I'm only being honest.

[Norb]

Yeah I'm confused, there are already low priced iPhones...

[dsg]

the 3Gs could make a come back, it blows most of the cheaper Android devices out of the water

[mustard05]

Yeah I'm confused, there are already low priced iPhones...

Yes, there are. Which is why I disregard Gene Mustard.

[klouud]

The iPhone 4S is $99 and the 4 is free on contract. Can't get cheaper than free. In one more generation when the 4 is gone then the free iPhone will be the 4S, and it'll have the turn by turn directions and great camera and everything. I don't think Apple needs to have a "cheaper" iPhone. They already have cheap iPhones. What they need are colors and different screen sizes. They make different sized Macs, iPads, Displays, why is the iPhone different? I just find it odd that they know that different consumers want different sizes in all these other products, yet they keep sticking to this "optimal" size for the iPhone. They need to have the 4S size, the 5 size, and they need to release a version with a GSIII or Razr Maxx screen size (WIDER!) as well. I'd buy that in a heartbeat. Not to mention the battery gains they'd get from the larger form factor, like the Razr Maxx HD. I had to use one of those for a month, and the screen size and battery life blew me away. Not enough that I'd continue suffering Android, but the hardware was legit. Sign me up for an iPhone Max in red. Thanks Tim!

You said it all before I could. Plus, Androids are priced exactly like iPhone's are... or the other way around... either way its irrelevant -- Anywho, the point is that you can get a bleeding edge Android/iPhone for $199 and an ok one for free. I don't see why we need to change anything... the pricing is the same and the tech on both sides is excellent. Sooooo... the analyst's statement is just ridiculous.

[VerizonIphone4_help]

gene mustard has no idea >.> why in the world would apple release a cheaper iphone? They have nearly every darn thing in the market right now from ipod nano to iphone to ipad mini to ipad. Then they have everything covered in the traditional pc and laptop market as well.

Unless apple makes up a new category, like they did with the iphone and ipod, they a have no need to introduce another product line.

[HomieG35]

Loving the Note 2! Now just need to sell the MBP... the iPad is worth keeping... I guess... Apple is falling behind quick.... or did they ever catch up

[blueaviator]

Loving the Note 2!

I'm with you there... Got very disappointed by the iP5... Bought the Note 2, sold my iPhone 5 after a few days... This thing is a beast!!! Makes the iP5 look like a kid's toy! But unlike you, my MBAir there's no way I am selling it!!!

[iH85CH001]

Flip that picture of the arrow upside-down and then you will see the unfortunate reality of Apple products.

[mustard05]

I'm with you there... Got very disappointed by the iP5... Bought the Note 2, sold my iPhone 5 after a few days... This thing is a beast!!! Makes the iP5 look like a kid's toy! But unlike you, my MBAir there's no way I am selling it!!!

As I said earlier, I went to the store today to check out the Note2. I was shocked when it slid right in my pocket. The rep said they will prob go on sale after the holidays. I am seriously thinking about making the sw

gene mustard has no idea >.>

Awesome, I am so proud I got someone else to call this guy Gene Mustard. And, that is because he is mustard. So are his predictions and his horrible surveys with 20 people that seem to get blogged about all over the place.

[redstar299]

I have an iPhone 5 and a Galaxy s3 .. I do like the bigger screen ..but they are 100% that it is easier to type on the iPhone

[mustard05]

I have an iPhone 5 and a Galaxy s3 .. I do like the bigger screen ..but they are 100% that it is easier to type on the iPhone

What are you saying in the last part of your comment? Is it easier to type on the S3? I would assume it is but I am an Android virgin.

[klouud]

You guys advocating the GS3 and Note 2 are dead on. I have buddies that each have a note 2 or GS3 and they are pretty cool. The only problem with them is they are both running Android. So its a big no for me. I've used both OS's extensively and IMO iOS is the superior platform. I'll be waiting until next October to roll around and be upgrading my 4S to the new iPhone. Sheep? Nope. I made my own mind up through personal research.

[methamp]

I believe it would be a mistake to devalue the brand so much that subsidized pricing becomes the MSRP. The experience comes with its own costs.

[buttamix]

The phones aren't bad at all the really need to drop the price of the iPads.