Entry Level iPhone May Generate $6.5 Billion for Apple This Year

[Michael Essany]

It's been a persistent rumor for months. Apple is reportedly planning to release a modest, scaled-back, lower-cost version of its iPhone this year as a means to entice emerging markets and smartphone newbies. After all, once a product buyers is caught up in Apple's gravitation pull, it's an ecosystem they're very likely never going to escape from.

Gene Munster of Piper Jaffray predicted this week that Apple will unleash a new unsubsidized phone with a $200 price tag this year. Munster says that a less expensive iPhone "won’t necessarily hurt Apple’s overall profit margin if it attracts buyers who haven’t bought iPhones before and not those who would have been willing to purchase the higher-end device."

Despite the anticipated average selling price of the iPhone tumbling from $640 to $520, Munster sees Apple adding $6.5 billion in revenue to its bottom line if this "inexpensive iPhone" manifests and takes off.

According to DigiTimes, the new iPhone model will be primarily aimed at China and other emerging markets, where Cupertino’s flashy kit hasn’t fared nearly as well as it has in the US and Europe.

Regardless of how it all shakes out, Apple may have no choice but to release a lower-priced iPhone. After all, inexpensive Android devices are now flooding the market and taking a bite out of Apple's smartphone share.

Source: Forbes

[bigboyz]

We've heard this rumor before..yet its still knocking persistently. I hope it does drop so that users have more options for iOS. My question is will Apple end up losing $$, due to consumers adopting the cheaper iPhone over the current offering? Guess time will tell but i'll bet Apple waited this long as they were wondering the same thing.

[subywrex]

I think having the option all the way back to an iPhone 4 is great. It gives people the choice. And with subsidized prices at 99 cents it gives that option to those who 1. Can't afford the latest and greatest and 2. Who really don't care lol

[sane]

We've heard this rumor before..yet its still knocking persistently. I hope it does drop so that users have more options for iOS. My question is will Apple end up losing $$, due to consumers adopting the cheaper iPhone over the current offering? Guess time will tell but i'll bet Apple waited this long as they were wondering the same thing.

Are three options not enough? At $0, $99, & $199 and up, not sure why you'd want less than an iPhone 4 for $0.

Plus why would they? It makes no sense and will lead to a market more fragmented than it already is.
I could see them coming up with colors and pretending its a really original idea. That is can see.
*shudder*

[docmagoo2]

I think having the option all the way back to an iPhone 4 is great. It gives people the choice. And with subsidized prices at 99 cents it gives that option to those who 1. Can't afford the latest and greatest and 2. Who really don't care lol

Reason Iv held off is the scratching of the bezel issue. That would drive me crazy! My iphone4 is still intact and mint after 18 months. Do they still have this issue?

[Torinate]

Are three options not enough? At $0, $99, & $199 and up, not sure why you'd want less than an iPhone 4 for $0.

Plus why would they? It makes no sense and will lead to a market more fragmented than it already is.
I could see them coming up with colors and pretending its a really original idea. That is can see.
*shudder*

I agree! Can't see any logical sense to it! Unless people want an even more watered down version.

Problem is, the iPhone is mid pack. If it was miles above the others (it's not), it could work. But, when the android's stats are that much better, I don't see a market for it.

Kind of like selling a watered down version of a Chevy cavalier that's going to compete against Cadillacs.

I love my iPhone, but its not a stand out. It was left in the dust...

[kyphur]

Are three options not enough? At $0, $99, & $199 and up, not sure why you'd want less than an iPhone 4 for $0.

Are you really missing the "Unsubsidized" part of the $200 price tag?

That's the point, without a contract discount it would be affordable to more people. This would open it up to the growing pre-paid market and also make it viable for someone to replace a broken/stolen iPhone mid contract without going broke.

This is actually not a bad idea...

[subywrex]

I agree! Can't see any logical sense to it! Unless people want an even more watered down version.

Problem is, the iPhone is mid pack. If it was miles above the others (it's not), it could work. But, when the android's stats are that much better, I don't see a market for it.

Kind of like selling a watered down version of a Chevy cavalier that's going to compete against Cadillacs.

I love my iPhone, but its not a stand out. It was left in the dust...

Please explain how the iPhone has been left in the dust? According to an article I read (how much validity in this is unknown nor to I care to research further)
"iPhone’s market share in the US increased to 48.1%, and surpassed Google‘s Android 46.7% in the twelve weeks ending October 28, 2012 according to a report released by Kantar Worldwide"

Many sources (easily found with a google search) this increase is due to the fact that 3 models of the iPhone are in production and can currently be purchased.

[tihomirbg]

Are three options not enough? At $0, $99, & $199 and up, not sure why you'd want less than an iPhone 4 for $0.

Plus why would they? It makes no sense and will lead to a market more fragmented than it already is.
I could see them coming up with colors and pretending its a really original idea. That is can see.
*shudder*

Think of it this way. The $0 iPhone 4 comes with $100+ monthly bill for 2 years. Otherwise- full price is $450 to$ 849. Now, with less expenssive iPhone, ppl can buy the phone and use it with any cell provider- even prepaid for $45-$55 a month.

[[email protected]]

Probably $199 without a contract. It'll probably have a few things to entice people away from the 4, but keep the nicer phones awesome enough to make it difficult for those of us who have been spoiled to go back. But, the "not having a contract" thing and offering an iPhone that's inexpensive, yet "new/different" will be what would make this idea sink or swim.....I think, maybe, but I really have zero evidence to support that. I actually think I made up that reason basically....... besides, the "if it ever really happens" thing is still a big hitch. Maybe I got the idea from previous experiences like the iRattler (I just made that product up to create support for my aforementioned reason). Knowing how apple wants their product in every persons hand, the new iRattler should be cost effective enough to entice babies, but not all of them will give up their iPad mini.

[subywrex]

Think of it this way. The $0 iPhone 4 comes with $100+ monthly bill for 2 years. Otherwise- full price is $450 to$ 849. Now, with less expenssive iPhone, ppl can buy the phone and use it with any cell provider- even prepaid for $45-$55 a month.

TMO offers a 70 dollar unlimited plan for reach line. I pay 180 for 2 iPhone plans. So the savings per month of TMO would be 40 per month. 40X12 is 480 saved per year.

iPhone 5 is 649 retail I paid 200 so that's a savings of 449 x 2 phones means it will take 2 years of lower payments to beat the savings of a subsidized price.

For me not worth it at all to have to fork over 649 up front

[Venom1234]

Nexus 4 baby!

[Devilish4eveR]

We've heard this rumor before..yet its still knocking persistently. I hope it does drop so that users have more options for iOS. My question is will Apple end up losing $$, due to consumers adopting the cheaper iPhone over the current offering? Guess time will tell but i'll bet Apple waited this long as they were wondering the same thing.

I doubt that Apple will loose any money on this... Take the iPad & iPad Mini as examples... Apple is actually making huge profits even thou the Mini took a small share of the market off the iPad... Me I never wanted an iPad... wayyy to big for my taste. As soon as they came out with the iPad Mini, I was all for it for my own reasons (screen size & overall weight & pricing were important for me)...

[Jahooba]

It'll probably just be a thinner iPhone 4S.