According to analyst Gene Munster, Apple could be launching a cheaper version of its iPhone in the next two years. The prediction is that the low-cost Apple smartphone will launch by 2014 and will be priced at $200 (Rs. 11,000). The analyst suggests that this new device could be targeted at emerging markets like India and China. The reason that the iPhone doesn’t sell in countries like India is because carriers refuse to subsidize the device and tie the consumers in a contract, a system that is highly prevalent in the US.
The iPhone 5 is available for $200 if it is purchased with a carrier contract but if a user wishes to purchase the factory-unlocked version of the smartphone, he has to pay more than $600 for it. It is clear if Apple wants to penetrate the India and China markets, it will have to reduce the iPhone 5 starting price of Rs. 45,500.
The emerging markets, like India and China are flooded with budget smartphones that offer users bang for their buck. Android is the dominant OS in these budget phones and we have seen smartphones running Microsoft’s Windows OS too launch at affordable rates.
The latest smartphone sales data published by Gartner, shows that Google’s Android OS is currently accounting for more than 70% of the world smartphone market where as Apple has less than a 15% smartphone share.
The launch of a $200 iPhone would seem like a smart move on Apple’s part considering that 53 per cent of worldwide smartphone sales in the third quarter of 2012 came from the Asia-Pacific region, which also accounts for more than 60% of the world’s population. Being a premium product, Apple’s iPhones have generally found their way into the pockets of the wealthier section of society in this part of the world.
Another reason why Apple may launch a cheaper version of the iPhone is that it recently launched a 7-inch iPad mini to compete with the plethora of 7-inch tablets dominating the market. While it is true that Apple offers the previous iterations of its products at a lower cost, this time they might just launch a new device priced lower than what it normally does.
Munster is a managing director at Piper Jaffray, and his coverage includes Apple, Google, Yahoo, Amazon, Baidu, and MercadoLibre.
Source: Emirates247 and Techthirsty