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Apple Reportedly Working on Cheap iPhone to Grow Market Share

2013-03-09 22:50:13 / Posted by Shawn Hamilton to News
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cheaper iPhone is coming

The widespread news that Apple will roll out a cheaper version of the iPhone for China and other emerging markets in the second half of 2013 has caused much shock among many investors.

Growing sales of the iPad mini, particularly in China and other emerging markets, may have served as an impetus for Apple to roll out a low-cost iPhone to repeat its success gained on the sale of the iPad mini, the sources commented. Other sources also indicated that Apple also plans to cooperate with China Mobile to launch a TD-version of iPhone to ramp its penetration in the China market.

Cheaper doesn't Mean Low-Cost

Some have said suggested that a cheaper iPhone could be priced around $330, sport a 4.5-inch screen, and have a polycarbonate body. Apple CEO Tim Cook recently said in an interview that quality products are the company's North star. With this mind, even if Apple releases a lower-priced phone, it likely won't be a cheap one.

The phone could be made cheaper by using less expensive parts, the WSJ says. For example, it could use a different shell made of polycarbonate plastic, or parts recycled from older iPhone models. This isn't the first time the WSJ has reported that Apple was exploring such a device – in 2011, it issued a similar report, again citing the ever-present "people familiar with the matter" as sources.

According to the WSJ report, Apple has been developing this cheaper iPhone for years, but could not decide how to move forward with the device.

Lower Price to Grow Market Share

Though the lower-priced iPhone is so hotly debated, Apple could still decide it doesn't need this type of product on the market right now. If that happens, seems that Android will continue growing in developing countries, with Windows Phone and BB10 following far behind. Besides making big profit from its products, Apple also knows how to stand out and rule out all its competitors as well (think iPod).

As mobile analytics show that the largest addressable markets for mobile apps in 2012 includes India, China, and Japan, among others. China in particular saw quick gains in 2012, with the country having climbed into the No. 2 spot in terms of new iOS and Android activations as of March. China is now Apple's second-largest market, but iPhone sales are losing traction to competition from Samsung and Nokia, plus domestic handset makers like Huawei, ZTE, and Lenovo.

With the iPhone 4 and 4S still selling worldwide, it will need to carve out new niche within its product line if does bring a cheaper phone to market. But investors need to see Apple do something in the emerging markets -- and soon.

I personally agree that iPhone would come with the cheaper iPhone to enlarge its market share. A cheaper iPhone would be ideal, and would no doubt help Apple gain a large market share in places like China and India. You could say that Steve Jobs is a genius with infinite creation; still you cannot underestimate the marketing power of Cook.

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