Apple's Lower-Cost iPhone As a 'Mid-End' Device

Discussion in ' News Discussion' started by MacRumors, May 3, 2013.

  1. MacRumors macrumors bot


    Apr 12, 2001

    AllThingsD shares details on a new report from J.P. Morgan analysts Gokul Hariharan and Mark Moskowitz, who unsurprisingly argue that Apple's rumored lower-cost iPhone will still be a "mid-end" device rather than competing against the true low end of the smartphone market. The analysts point to Apple's previous introductions of the iPod nano and iPad mini as cheaper versions of their parent products that were still significantly more expensive than low-end competitors due to Apple's refusal to sacrifice quality for the sake of price.

    Echoing some previous rumors, Hariharan and Moskowitz suggest that Apple's lower-cost iPhone is likely to cost $350-$400 without subsidies, significantly cheaper than the iPhone 5 that starts at $650. The analysts point out that such a device would come in at a relatively sparsely-populated midrange of a pyramid that sees strong unit sales at the top and bottom but weakness in the middle.
    On a separate note, Digitimes is reporting today that Apple's lower-cost iPhone will be specifically targeted at emerging markets and will initially launch in limited volumes in order to test interest in the device. The report claims that Apple is expected to deliver only 2.5-3 million units during the device's first quarter of availability.

    While Apple almost certainly has interest in bringing such a device to emerging markets, it seems more likely that Apple will offer the device on a broader basis in order to appeal to consumers in the numerous markets where subsidies are not common. Even the United States is seeing pushback against subsidies to some degree, with prepaid carriers gaining customers while also beginning to offer the iPhone, and even major carriers like T-Mobile shifting their strategies to end packaged subsidies and instead break out phone costs on separate payment plans.

    Article Link: Apple's Lower-Cost iPhone As a 'Mid-End' Device
  2. ka-spot macrumors 6502a

    May 23, 2012
    Sofia, Bulgaria
    nice.. Europe will enjoy the new cheap iPhone :)
  3. Small White Car macrumors G4

    Small White Car

    Aug 29, 2006
    Washington DC
    I'd kind of always assumed this.

    Apple's "low end" Mac (the Mini) still costs more than most Dells. Their "low end" laptop (the Air) is certainly no netbook. The iPad Mini is certainly cheaper but it's no $199 Android-competitor. I expect the "low end" phone to be something similar.

    The big question...will they keep selling the old phone as a cheaper alternative? Or maybe just last year's instead of the last 2 years? That's the part that will dictate where this new "cheaper" phone falls in the lineup.

    ** (All this is assuming it's for sale everywhere. If it's being made ONLY for emerging markets, all bets are off.)
  4. phillipduran macrumors 65816


    Apr 30, 2008
    Go low, sell at cost. Claim the whole market. Recover the money from iTunes sales.

    An iPhone in every pocket!
  5. spicynujac macrumors regular

    May 24, 2012
    I know I'm in the minority here (on MR) but $350-$400 is still alot of money for me to spend on a telephone. I'm currently on T-Mobile for their low monthly rates. I've gotten by for years with a standard feature phone + ipod touch and in a few months when faced with the choice of buying an ipad mini or iphone for basically the same price, I really think I'll stick with my current setup and just add the ipad mini. The ability to talk on one device, and browse the web or take notes or add to my calendar on another is an advantage to me. Plus ironically a cell data plan for my ipad is $10, while it's $30 for a phone. I'm excited by the idea of a lower cost iphone but when you look at the price and consider they will likely be shaving off features, it doesn't compare very well to either the touch or the ipad mini in cost / benefit.
  6. JAT macrumors 603

    Dec 31, 2001
    Mpls, MN
    No ****.
  7. Big Dave macrumors 6502

    Nov 27, 2007
    Crestview, Fl
    If the iPad mini had a phone on it, then it would be all I need. I could use iPhone ear buds or a blutooth device. I have read that you can use skype or other apps to make phone calls with the mini but I would like a dedicated phone number. I would also like data plans to be cheaper.
  8. hydr macrumors regular

    Feb 25, 2009
    "only 1.5-2millions" oh how the times have changed :)
  9. ThunderSkunk macrumors 68030


    Dec 31, 2007
    Milwaukee Area
    Bean Counters: Apple should spend its time creating versions of products they already make to fill out every possible niche in the price category.

    Product Designers & Design Engineers: We have a million cool futuristic technologies we could be developing and putting into products that'd blow everyone away with innovation instead.

    Customers: This is all boring, this is just more of the same product they've been making since the iphone came out in 2006.

    Who wins?

    In most companies, the bean counters. Thankfully, Apple isn't headed by a bean c... oh. crap.
  10. alq macrumors member

    May 6, 2011
    either I did not understand the article or you don't know what emerging markets are.

    One for sure - Europe isn't.
  11. M-O macrumors 6502a


    Mar 15, 2011
  12. Consultant macrumors G5


    Jun 27, 2007
    Well the problem is that there isn't enough production capacity to produce all those profit-less devices.
  13. bushido Suspended


    Mar 26, 2008
    pointless, i can get an iPhone 5 for 1€ on a 29€ plan and it will be too expensive for emerging markets still
  14. Porco macrumors 68030


    Mar 28, 2005
    "Mid-End"?! That's a non sequitur if ever I saw one.
  15. needfx macrumors 68040


    Aug 10, 2010
    macrumors apparently
    is there a sexual hint in this or is it just me?

    Attached Files:

  16. Elbon macrumors 6502a


    Jan 9, 2008
    Boston, MA
    For me, it isn't the cost of the device that is prohibitive - it is the recurring cost of the voice/text/data plan. A typical "individual" plan runs about $75 a month these days. I'm obviously in the minority, but I think that's crazy. I'd be happy to pay, say, $35 a month for a limited voice/no text/2GB data plan, but no one is currently offering that.

    So, I have a pre-paid voice plan with T-Mobile that costs me 10 cents per minute (which, for me, translates to about $6 a month) and a $30 T-Mobile data plan with a wi-fi hotspot. I use my feature phone for voice calls and my laptop/iPod Touch/iPad with the hotspot for everything else.
  17. 1member1 macrumors 6502

    Sep 8, 2012
    They should make it unlocked without any carrier and sell it in apple store. it will sell like hotcakes if it will be good.
  18. ThunderSkunk macrumors 68030


    Dec 31, 2007
    Milwaukee Area
    I have a skype acct with a dedicated number. Number costs $30/yr, and the unlimited phone service is $2/mo. It runs just fine on my mini. About half the time, I use the iPhone earbuds & mic, & the other half, I just speakerphone it. ...& it doesn't sound like speakerphone. Works great.

    Apple has a decent service for every method of communications possible except voice (only). What's weird is, they used to, with iChat, and the only reason I can think they ditched it in their communications suite is to appease the cell providers they were trying to get to carry the iPhone.

    So, now we're stuck using Skype, which might be the worst app in the appstore, now that MS bought it and made a damn disaster out of the UI.
  19. bungiefan89 macrumors 6502a

    Apr 5, 2011
    This is so stupid. It's like, "People are not buying a lot of phones in the $425-450 price range. Therefor, there's a great untapped market of people with $425-450 in their pocket who want to buy phones at that price range! DEPLOY THE CHEAP iPHONE!!!" :rolleyes:

    Maybe I'm eager to mock this stuff because I still can't see myself buying in to the smartphone craze any time in the near future and would much rather listen to some real mac rumors about the new Mac Pro or something instead of all these iToys. But even then, I still think the attempt at logic is pretty poor here.
  20. DesertEagle macrumors 6502a


    Jan 10, 2012
    /home @
    To the analysts, it does.
  21. Greg. macrumors 6502


    Sep 12, 2010
    London, UK
    Just you.
  22. iDemiurge macrumors 6502


    Feb 7, 2011
    What's wrong with saying 'mid-range'?

    This tech newspeak has gone too far...
  23. Four oF NINE macrumors 68000

    Four oF NINE

    Sep 28, 2011
    Hell's Kitchen
    So where's the news about the iPhone 5S ? I'd be more interested in that one.
  24. gnasher729, May 3, 2013
    Last edited: May 3, 2013

    gnasher729 macrumors P6


    Nov 25, 2005
    "Mid-level" or "mid-range" would be the correct term.


    Could be because nobody is selling a phone at that price for some reason. My suggestion: Blown-up iPhone 3GS. A bit modernised, big screen, big battery.

    Sounds like US customer. Compared to the UK for example, the phones in the USA are dirt cheap but the contracts are ridiculously expensive. In the UK, iPhone 5 is £529; two year plan at O2 costs £37 per month, which works out to be £20 for the phone and £17 for the plan. Looks like the opposite of the US. So here a £300 phone would be some very significant saving.
  25. SwiftLives macrumors 65816


    Dec 7, 2001
    Charleston, SC
    This is similar to Apple's strategy with the iPod. Start out with a premium device, then create new devices to fill lower price points.

    I am curious with the iPhone as to how they would differentiate the lower priced device from the higher price.

    I'd guess a different form factor and a screen the size of the 4S - Plastic or some sort of non-conductive metal shell in a few different colors. Maybe leave out LTE for the first generation. iPhone nano? iPhone mini? And I wonder how thin they can make it...

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