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Old Jun 20, 2013, 10:57 AM   #1
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Pegatron Chairman Says Lower-Cost iPhone Will Not Be Cheap




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.

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
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Old Jun 20, 2013, 10:58 AM   #2
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Told ya. It will cost like 400/500€ on release.
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Old Jun 20, 2013, 11:00 AM   #3
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Lower cost was never going to be cheap. But good value doesn't have to mean cheap.
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Old Jun 20, 2013, 11:01 AM   #4
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When does apple price anything cheap?
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Old Jun 20, 2013, 11:01 AM   #5
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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.
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Old Jun 20, 2013, 11:02 AM   #6
Tankmaze
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Not cheap huh? Maybe $ 500 price point start (unsubsidized), if its get cheaper it would eat the ipod touch market. (Maybe)
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Old Jun 20, 2013, 11:02 AM   #7
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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.
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Old Jun 20, 2013, 11:02 AM   #8
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Cheap by Apple standards doesn't mean CHEAP.
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Old Jun 20, 2013, 11:03 AM   #9
NotAdvisable
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Originally Posted by jakebot View Post
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.
Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
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Old Jun 20, 2013, 11:04 AM   #10
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Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
Logic fail.
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Old Jun 20, 2013, 11:04 AM   #11
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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.
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Old Jun 20, 2013, 11:05 AM   #12
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Originally Posted by NotAdvisable View Post
Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
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
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Old Jun 20, 2013, 11:05 AM   #13
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Logic fail.
?? How so?
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Old Jun 20, 2013, 11:05 AM   #14
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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.
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Old Jun 20, 2013, 11:07 AM   #15
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just gonna buy a used iphone 4
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Old Jun 20, 2013, 11:07 AM   #16
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Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
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.
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Old Jun 20, 2013, 11:07 AM   #17
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Quote:
Originally Posted by NotAdvisable View Post
Simply because Apple need to compete in the low to mid cost Android market for iOS to remain competitive.
Logic fail.
How exactly is that a "logic fail"..?
Please explain.
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Old Jun 20, 2013, 11:08 AM   #18
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I'm still not convinced that this'll happen at all.
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Old Jun 20, 2013, 11:08 AM   #19
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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.
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Old Jun 20, 2013, 11:09 AM   #20
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Apple just doesn't do cheap. It's not going to participate in any races to the bottom.
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Old Jun 20, 2013, 11:09 AM   #21
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Originally Posted by bondsbw View Post
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.
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
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Old Jun 20, 2013, 11:09 AM   #22
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It needs to be about 200-250 maximum I think. Most likely it will be $400 which = 400 in corporate terms
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Old Jun 20, 2013, 11:09 AM   #23
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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.
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Old Jun 20, 2013, 11:11 AM   #24
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Originally Posted by Goftrey View Post
I'm still not convinced that this'll happen at all.
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
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Old Jun 20, 2013, 11:12 AM   #25
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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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