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Pegatron Chairman Says Lower-Cost iPhone Will Not Be Cheap

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macrumors bot
Original poster
Apr 12, 2001
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Last month, J.P. Morgan analysts made their case for why Apple will position its rumored lower-cost iPhone as a "mid-end" device priced in the range of $350-$400 without subsidies, addressing a relatively sparse segment of the market while still maintaining the ability to offer a quality user experience.

Mac Otakara now points to a pair of reports from the China Times including claims from Pegatron chairman T.H. Tung supporting that notion. Pegatron has been said to be the primary assembler for the lower-cost iPhone, with Foxconn focused on the iPhone 5S.

lower_cost_iphone_colors.jpg
Rendering of lower-cost iPhone in colors from iPhone 4 bumpers (Source: Mac Otakara)​
According to the first report [Google translation] from the China Times, Tung addressed the iPhone at a meeting of the company's shareholders, expressing his displeasure with reports referring to the lower-cost iPhone as "cheap" and noting that the "price is still high". Tung apparently believes that attaching the "cheap" description to the lower-cost iPhone gives the impression of a low-value feature phone rather than the full-featured smartphone it will actually be.

A second report [Google translation] quotes Tung as saying that Pegatron's factories remain busy with nonstop production. The company has been reported to be undertaking a significant expansion of its workforce for the second half of this year, presumably to support production of the lower-cost iPhone. China Times indicates that Pegatron is ramping up for shipments of 13-15 million units of the device during the third quarter.

Apple's lower-cost iPhone is expected to launch around the same time as the iPhone 5S, with September being the most commonly cited timeframe. The lower-cost iPhone is said to be very similar to the iPhone 5/5S but with a slightly thicker plastic shell that will be available in a number of colors.

Article Link: Pegatron Chairman Says Lower-Cost iPhone Will Not Be Cheap
 
Article Link
https://www.macrumors.com/2013/06/20/pegatron-chairman-says-lower-cost-iphone-will-not-be-cheap/
jakebot

jakebot

macrumors member
Mar 2, 2007
82
1
Vancouver, BC, Canada
I still don't understand the need for this. We already have this as the iPhone 4 and 4S, and soon the iPhone 5 will be in this category once the 5S is released. Why waste resources designing an entirely new product when they already have older iPhones they sell for less with no additional costs to build.
 
Tankmaze

Tankmaze

macrumors 68000
Mar 7, 2012
1,707
351
Not cheap huh? Maybe $ 500 price point start (unsubsidized), if its get cheaper it would eat the ipod touch market. (Maybe)
 
N

NotAdvisable

macrumors regular
Nov 16, 2011
220
90
Perth, Australia
I still think it'll be in the $200 - $300 rage if Apple want to actually be competitive; they'd be able to go places where the current iPhone pricing scheme can't.
 
N

NotAdvisable

macrumors regular
Nov 16, 2011
220
90
Perth, Australia
jakebot said:
I still don't understand the need for this. We already have this as the iPhone 4 and 4S, and soon the iPhone 5 will be in this category once the 5S is released. Why waste resources designing an entirely new product when they already have older iPhones they sell for less with no additional costs to build.
Click to expand...

Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
 
I

inlinevolvo

macrumors 6502
Jul 11, 2012
359
3
Don't we as apple users label the plastic galaxy line of phones as feeling cheap? I see no reason to make an exception for apple with their plastic iphone. It is THE cheap feeling iphone.
 
mattopotamus

mattopotamus

macrumors G5
Jun 12, 2012
14,666
5,879
NotAdvisable said:
Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
Click to expand...

selling a phone for $500 is not competing with low cost android phones no matter how you spin it.

Another $150 gets me the real thing, and if someone can afford $500 they can likely afford $650
 
B

bondsbw

macrumors member
Sep 7, 2006
85
37
I never understood the obsession with a lower-cost version of the iPhone.

When the 5S comes out, the lower-cost versions will be the 5 and 4S.

This has worked just fine in the past, I don't see why Apple would put much of an effort behind another product to fill the same gap.
 
blackburn

blackburn

macrumors 6502a
Feb 16, 2010
974
0
Where Judas lost it's boots.
NotAdvisable said:
Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
Click to expand...

Yeah but Apple will never release an 200€ iPhone. I highly doubt that Apple will attempt to compete on the low cost market. Even on the "medium" range market. It's more like high-end and flagship markets.

When people pay the phone upfront they won't toss 700€ to buy an phone. And I still don't see the need to sell the iPhone 4 / 4S since the price difference is minimal.
 
A

aneftp

macrumors 601
Jul 28, 2007
4,363
549
The "cheapest higher end phone is Nexus 4 at $299/8GB" and we don't know how much google is subsidizing LG cause LG sells the same phone as the Optimus G for $550 retail

How much cheaper can apple go.

Phones cost $150-200 to manufactuer (before R and D and advertising is even accounted for). Even if Apple wanted to put cheaper parts/older processors, we are still looking at at least $125-150 to build the phone.

Apple operates on margins. No way they can sell a cheaper iPhone for less than $350 full retail price.
 
T

Tiger8

macrumors 68020
May 23, 2011
2,479
649
bondsbw said:
I never understood the obsession with a lower-cost version of the iPhone.

When the 5S comes out, the lower-cost versions will be the 5 and 4S.

This has worked just fine in the past, I don't see why Apple would put much of an effort behind another product to fill the same gap.
Click to expand...

Because not everyone wants to spend $650 on a phone, and not everyone wants to be tied to a 2 year contract with a $90 plan.

No one is saying Apple should compete with $200 phones, price will probably be in the $399 range, making it 'free' on contract, affordable for those who want to go Net10 or Straighttalk.

Think of it as adding even more carriers onboard. Apple nailed the post paid phone market, about time they take the prepaid phone market too
 
PeteJames

PeteJames

macrumors regular
Sep 11, 2010
133
0
England
It needs to be about £200-250 maximum I think. Most likely it will be $400 which = £400 in corporate terms
 
S

Serban

Suspended
Jan 8, 2013
5,159
928
i think when iphone 5s will come out...the iphone 4/4s and 5 will be gone and together with this new iphone will share the store.
 
T

Tiger8

macrumors 68020
May 23, 2011
2,479
649
Goftrey said:
I'm still not convinced that this'll happen at all.
Click to expand...

That's what we thought about two iPads in one year, or the iPad mini, or the bigger screen iPhone,,, 'never gonna happen' or 'if it ain't broke' or 'it's the perfect size' or 'apple releases products once a year'.

Times are changing my friend
 
scbn

scbn

macrumors 6502
Jul 25, 2010
272
22
It's cheaper, not cheap

Cheaper than the regular iPhone, but not a cheap one. It'd be good for the kids.

In the U.S., it probably will sell $49 - $99 with a 2-year contract.
 
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