Pegatron Chairman Says Lower-Cost iPhone Will Not Be Cheap

[iGrip]

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.

Despite the factors you cite, Apple thinks that they will increase their total profits by adding this device to their lineup.

From everything I have seen, Apple knows very, very well how to move cash out of consumer's pockets and into the pockets of the Hedge Funds.

Personally, I'd bet that Apple is right and that you are mistaken.

 

[jakebot]

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

My point was that you can already get a $450 unlocked iPhone 4. So why would apple need to redesign an entirely new iphone and sell it at the same price as their "lower end" iPhones they already have for sale at that price (iPhone 4 and 4S)

They could just go a little cheaper and there you have it.

 

[NotAdvisable]

Shoot me down all you want guys, but I think it'll be a maximum of $299.
Apple needs a phone at this price level to become fully competitive, and it'll really shut-up people who constantly kick Apple over pricing.

 

[Reason077]

I'm really looking forward to this "low cost" iPhone model.

Finally, a proper successor to the iPhone 3GS - which was arguably the best iPhone made to date in terms of industrial design.

While I do love my iPhone 5 (admittedly superior in terms of thinness, lightness, and durability), its sharp edges are just not as comfortable or elegant as the smooth rounded edges of the 3GS.

 

[scbn]

Well, iPhone 4 is too old and would be painfully slow with iOS 7.

My point was that you can already get a $450 unlocked iPhone 4. So why would apple need to redesign an entirely new iphone and sell it at the same price as their "lower end" iPhones they already have for sale at that price (iPhone 4 and 4S)

 

[chrisk1]

Let's not declare this product a failure until Apple either announces or releases it.

 

[Treq]

I know it's a quote, but it really should be mid-range not "mid-end".

 

[NotAdvisable]

My point was that you can already get a $450 unlocked iPhone 4. So why would apple need to redesign an entirely new iphone and sell it at the same price as their "lower end" iPhones they already have for sale at that price (iPhone 4 and 4S)

They could just go a little cheaper and there you have it.

$450 to some people is actually a lot of money - and is classed as the high end range of smartphones. iPhone 4 is shocking with iOS7 so that's why their designing a lower cost iPhone - hell it might even only run iOS6.

 

[Chatter]

My guess...

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.

Margins

 

[NotAdvisable]

I'm really looking forward to this "low cost" iPhone model.

Finally, a proper successor to the iPhone 3GS - which was arguably the best iPhone made to date in terms of industrial design.

While I do love my iPhone 5 (admittedly superior in terms of thinness, lightness, and durability), its sharp edges are just not as comfortable or elegant as the smooth rounded edges of the 3GS.

So you would trade you iPhone 5... for this lower cost model with less features and the possibility of it only running iOS6... oooookkk then.

 

[inlinevolvo]

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.

Perhaps they can operate on the model amazon is using. Apple has a huge market share on content distribution, bigger than amazon. They could sell the phone at cost, or near cost and make money at the back end. I must admit this is highly unlikely, but there is money to be made here. Remember the "millions of iTunes accounts with credit cards"? My idea would only add to this.

 

[rockstarjoe]

I agree with an earlier post... when the iPhone 5s comes out, this "cheaper" model will just replace the iPhone 5. It will just be the iPhone 5 guts in a plastic shell.

 

[Reason077]

So you would trade you iPhone 5... for this lower cost model with less features and the possibility of it only running iOS6... oooookkk then.

Who says it will have less features than the iPhone 5? Remember, the 5S will be out by the time this is released.

And, it's completely ridiculous to suggest that a new iPhone model will only run iOS 6. It will definitely run iOS 7.

 

[JayLenochiniMac]

I'm not paying even $50 less for a fatter iPhone.

 

[iGrip]

So why would apple need to redesign an entirely new iphone and sell it at the same price as their "lower end" iPhones they already have for sale at that price (iPhone 4 and 4S)

Because Apple thinks that doing so will increase their total profits.

Seriously, this isn't even very hard. Anytime apple does anything, it is always for exactly the same reason: Apple thinks it will increase their total profits.

That is why they are releasing a cheap iphone. That is why they remade the MacPro into a MacMini on steroids. That is why they made the iMac unable to be upgraded and emphasized "thin" over "functional". That is why they got rid of Scott Forstall.

That is why they do anything and everything that they do: to send more of our money to the Hedge Funds..

 

[roadbloc]

I'm still not convinced Apple will even want to make a cheaper iPhone model. People who want a cheaper iPhone can buy an older model.

 

[Benjamins]

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.

well as far as general customer goes, iPhone 4/4s are considered old.

Why pay $500 for an old iPhone, when you can pay $500 for a new "low cost" one.

 

[iGrip]

I know it's a quote, but it really should be mid-range not "mid-end".

I crack up every time I see mid-end. It is an oxymoron. The middle cannot be the end.

 

[PFKMan23]

It'll be interesting to see the fnal specs of this device going forward and the effect on the sales of the 4S or other older iphones that Apple plans to carry in the future.

 

[Reason077]

I'm still not convinced Apple will even want to make a cheaper iPhone model. People who want a cheaper iPhone can buy an older model.

If the smartphone market basically only consisted of Apple (like it did a few years ago), then I'd agree with you.

But these days Apple are not just competing with themselves - they're targeting Android, Nokia, etc with this new model.

There's definitely a mid-range market of people who aren't looking to buy the most expensive phone on the market, but who also aren't interested in buying last year's phone model. Currently that market goes straight to Android and that's who Apple are trying to target here.

 

[Benjamins]

It'll be interesting to see the fnal specs of this device going forward and the effect on the sales of the 4S or other older iphones that Apple plans to carry in the future.

if there is a "low cost" iPhone, then they won't be selling old models.

 

[mccldwll]

"... including claims from Pegatron chairman T.H. Tung supporting that notion."


"claims.. supporting that notion." Hmmmmm. Does anyone seriously believe that Pegatron's chairman actually made the statements, other than totally out of context, being attributed to him by China Times? Wanna buy a bridge?

 

[Bishope1999]

Aren't most sells of the Iphone subsidized? I really don't know and if anyone does, I would be interested in seeing how many people pay up front for the Iphone as to those that buy it for $200 or so down and finish paying the rest off in 2 years.

My point being that I assume most people pay around $200 for an Iphone upfront anyways, I doubt that the majority pay full price for it. Considering that, I don't see why a $300 Iphone would be such a big deal. I'm sure apple can make a quality $300 Iphone for those people that just want to use it to talk and text but still want to have Iphone without needing to pay $750 for it or be stuck on a 2 year payment contract.

Now, If Apple didn't allow carriers to subsidize their phones and everyone had to pay full price for it, I would understand it then because Apple would want to keep that price point.

 

[jonnysods]

Would apple ever release something that didn't have a good profit margin?

 

[Benjamins]

Aren't most sells of the Iphone subsidized? I really don't know and if anyone does, I would be interested in seeing how many people pay up front for the Iphone as to those that buy it for $200 or so down and finish paying the rest off in 2 years.

My point being that I assume most people pay around $200 for an Iphone upfront anyways, I doubt that the majority pay full price for it. Considering that, I don't see why a $300 Iphone would be such a big deal. I'm sure apple can make a quality $300 Iphone for those people that just want to use it to talk and text but still want to have Iphone without needing to pay $750 for it or be stuck on a 2 year payment contract.

Now, If Apple didn't allow carriers to subsidize their phones and everyone had to pay full price for it, I would understand it then because Apple would want to keep that price point.

the difference between $0 after subsidized and $200 after subsidized is huge for some customers. Although they are both end up paying at least $25 more a month for a data plan they probably don't really need.