Analyst Claims Apple May Release $349 iPhone for Prepaid Markets This Year

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Fortune reports that Deutsche Bank analyst Chris Whitmore today released a new research note claiming that Apple may be preparing to release two new iPhone models later this year, with the usual iPhone revamp being joined by the debut of a cheaper model coming in at an unlocked, unsubsidized price of $349.
In a note issued early Monday, Deutsche Bank's Chris Whitmore is telling clients to expect both -- an iPhone 5 and an iPhone 4S.

"With Nokia and RIMM struggling," he writes, "the time is right for Apple to aggressively penetrate the mid range smart-phone market (i.e. $300-500 category) to dramatically expand its [total addressable market] and market share."

As Whitmore sees it, an iPhone 4S that is unlocked, priced around $349, and comes with a pre-paid voice plan would "drive significantly greater penetration" into an addressable market that has grown to include 1.5 billion potential customers in 98 countries, two thirds of whom prefer pre-paid plans.
Whitmore notes that while the market for prepaid smartphones is very small in the U.S., many other markets around the world have much higher levels of prepaid activity, and a cheaper iPhone would significantly lower the barrier to entry for those customers.




A cheaper (and in many cases smaller) "iPhone nano" has been the subject of many rumors over the years, although it is unclear just how Apple will be able pare down the current iPhone's feature set to bring the unsubsidized pricing down to the $349 level suggested by Whitmore, or even lower price points as suggested in previous reports. Unsubsidized pricing for the iPhone 4 begins at $649, although the 8 GB iPhone 3GS still sold by Apple comes in at a much lower $449. With Apple's iPod touch line starting at $229, there may in fact be some flexibility to put together a somewhat stripped down iPhone coming in at a price point in the $350 range.

Also unclear is the basis of Whitmore's claim, whether it be concrete information obtained from Apple's supply chain or mere speculation on what Apple "should" do.

A separate note issued yesterday by Morgan Stanley's Katy Huberty claims that Apple is set to begin ramping production of a new iPhone in mid to late August, suggesting that a launch might not occur until late September. Rumors have increasingly pointed to a September launch for the next iPhone, although many have been hoping that Apple will introduce it at an early September event in line with the company's usual iPod-focused event.

Article Link: Analyst Claims Apple May Release $349 iPhone for Prepaid Markets This Year
 

darkslayer13

macrumors member
May 6, 2010
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I just hope that the new iPhone that is ramping up is an iPhone 5 rather than just an iPhone "4GS". That would be disappointing, and not worth the wait.
 
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Small White Car

macrumors G4
Aug 29, 2006
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I know this stuff gets the 'iPhone Nano' crowd all excited, but it ain't happening.

This will be, let's say, an iPhone 4 with 8 GB of memory, no gyroscope, and no front camera. (Or something like that.)

It'll probably have a differnt name so they can sell it, an actual iPhone 4, and an iPhone 5 all at the same time. So, 3 models instead of the current 2.

But not a Nano.
 

ImNoSuperMan

macrumors 65816
Dec 1, 2005
1,218
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Apple can easily sell millions of these in India and other similar markets. iPhone barely sells here thanks to the slow launch of iPhone (iPhone 4 launched last month here :mad:) combined with ridiculously high prices (7-800 USD) for a year old phone about to be succeeded with a brand new version in US in a few weeks. $350 is a very good price for prepaid smartphones here. I really hope this is true.
 

AAPLaday

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Aug 6, 2008
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I know this stuff gets the 'iPhone Nano' crowd all excited, but it ain't happening.

This will be, let's say, an iPhone 4 with 8 GB of memory, no gyroscope, and no front camera. (Or something like that.)

It'll probably have a differnt name so they can sell it, an actual iPhone 4, and an iPhone 5 all at the same time. So, 3 models instead of the current 2.

But not a Nano.
A Touch with a radio :D
 

Crigger540

macrumors member
Jun 16, 2010
96
2
The Old Dominion
A cheap iPhone would cannibalize the sales of the expansive iPhone, while maintaining a lower profit margin. So it won't happen. (I think :rolleyes:)
No it wouldn't, the customers that have been buying the premium iphone will continue to buy the latest & nicest iphone, but the people who have been buying the $229 touch will now buy the $350 iphone nano. (which is what i would be inclined to).
 

TheAustrianGuy

macrumors regular
Apr 20, 2010
152
287
Why should Apple design an all-new pre-paid iPhone...

...when they have a then-quasi-outdated iPhone4 they can sell as low-end model?
 

Shipwrecked22

macrumors newbie
Jun 14, 2010
28
0
Maybe Apple plans on turning the iPod Touch into this cheaper iPhone. Each gen always carries specks lower then the iPhone already, so wouldn't it make sense to just add the cell chips and antenna and continue selling it for practically the same price? If all the rumors are right, the iPod Touch and iPhone are being released at the same time this year, which would make sense if that were true.
 

makingdots

macrumors 6502
Aug 14, 2008
291
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Just smack a 3G + GSM sim card on an iPod Touch.. Done!

That will worth around $400 I guess.

The problem is that prepaid folks doesn't have purchasing power to benefit the App store, maybe, Apple need to coordinate to carriers to enable direct purchasing of apps through a carrier's prepaid card?
 

dethmaShine

macrumors 68000
Apr 13, 2010
1,697
0
Into the lungs of Hell
- Essential for markets where pre-paid/post-paid plans are very popular. Among best examples would be markets like: India, China, Malaysia, etc.

I belong to India and I'm aware that almost every person who buys a phone is on a post-paid [per monthly] or a pre-paid plan. But both these plans do not include the cost of the phone. You've got to buy the phone yourself. $350 sounds like a great price for such a market.

- Lets be honest: not everyone affords an iPhone. I used to have an iPhone but at present I use Mozart7. I got a couple of Trophy7s for mom and my aunt.
Why? - work like an iPhone -- touch screen ... but cheaper than the iPhone. An iPhone 4 would have cost me close to £500. I got the other two for a total less than £500. :rolleyes:

- Not everybody carries an expensive phone. If I were to gift a phone to my little brother or probably my girlfriend, I'd buy a cheaper - non-iPhone model. If a cheaper option was there, I wouldn't have been bothered at all.

iPhone has to become cheap overtime if Apple needs to take care of some more people. They are going good with whatever they have but if they need to aggressively compete, they need a cheaper iPhone.
 

zweigand

macrumors 6502a
Oct 19, 2003
596
32
I've been begging for an iPod Touch with 3G ever since the iPod Touch came out. Once they unveiled the iPad with a data plan I really got my hopes up. PLEASE let this be true.

Right now I carry a $20 pre-paid dumb-phone + an iPod Touch.
 

M-O

macrumors 6502a
Mar 15, 2011
502
0
No it wouldn't, the customers that have been buying the premium iphone will continue to buy the latest & nicest iphone, but the people who have been buying the $229 touch will now buy the $350 iphone nano. (which is what i would be inclined to).
same here. if this were nothing more than an iPod touch with a cell radio, earpiece and relocated mic, i'd buy it.

iPhone A: 16GB, A5, 4G radio, 8MP camera, $199 on contract
iPhone B: 8GB, A4, 3G radio, 3MP camera, $299 contract free

something like that. heck to save money, just lower the price of the iPhone 4. which is more likely.
 

Cynicalone

macrumors 68040
Jul 9, 2008
3,212
0
Okie land
In the US I wonder how you convince Verizon and AT&T to support this.

The cost of the data plans seems to be the deal breaker for most people. AT&T is expensive but Verizon is going to be even more expensive if the rumors are true.

If Apple could find a way to hammer down the data plan cost then they could open a whole new market in the US.
 

wordoflife

macrumors 604
Jul 6, 2009
7,563
34
Virgin Mobile! Haha
Hey, for $25 a month, you can't really go wrong especially have an iPhone too. :p Too bad that's CDMA though
 

Schizoid

macrumors 6502a
May 29, 2008
814
405
UK
A friend of mine wants to get a job as an 'analyst' here's his resume:

I'm breathing and can walk
 

andiwm2003

macrumors 601
Mar 29, 2004
4,346
406
Boston, MA
hm, for the US:

what if they release a iPhone 5 unlocked for $649, a locked iPhone 5 with contract for $200 and an unlocked iPhone 4 for $349?

I would buy the iPhone 4 unlocked and run it on my current ATT contract. And so would many people and therefore the cheap unlocked iPhone would cut into Apples high end sales.

I don't think Apple allows this to happen.
 

FriarNurgle

macrumors regular
Jan 2, 2011
233
0
- Essential for markets where pre-paid/post-paid plans are very popular. Among best examples would be markets like: India, China, Malaysia, etc...
You make a great point, and thanks for sharing the hands on experience for the Indian market. I just don't feel this is a direction Apple will take... but apple does seem to be bouncing around a bit and loosing people so who knows. I still say it's a long shot though.
 

iZac

macrumors 68020
Apr 28, 2003
2,083
1,309
Shanghai
...when they have a then-quasi-outdated iPhone4 they can sell as low-end model?
Obviously apple sell the 3GS in an 8gb format at the moment to cater for a lower end market. But they (and almost all customers) realise what a terrible deal they are and ignore it. Plus there is no other product that Apple have where they sell an old model as a "budget" product.

It makes Apple sense to release a "new" model with restrictions and market them as features (e.g. shuffle, nano 6g)
 
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