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

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.
Currently Samsung dominates this segment ($200-500 price range) with 35+ percent market share. [...] We believe Apple could take 20-25 percent of this market in the next 12 months (from almost no market share currently), if it prices a lower-priced product at $350-400 levels.
jpmorgan_smartphone_price_pyramid
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.

Related roundups: iPhone 5c, iPhone 5s, iPhone 6

Top Rated Comments

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16 months ago

is there a sexual hint in this or is it just me?


Just you.
Rating: 19 Votes
16 months ago
'Mid-End' makes no sense.
Rating: 16 Votes
16 months ago
is there a sexual hint in this or is it just me?
Rating: 13 Votes
16 months ago


This is presumably what will happen :eek:
Rating: 8 Votes
16 months ago

Just you.


I need to stop posting on MR & get out more
Rating: 7 Votes
16 months ago
nice.. Europe will enjoy the new cheap iPhone :)
Rating: 7 Votes
16 months ago
Go low, sell at cost. Claim the whole market. Recover the money from iTunes sales.

An iPhone in every pocket!
Rating: 6 Votes
16 months ago
"Mid-End"?! That's a non sequitur if ever I saw one.
Rating: 5 Votes
16 months ago
They should make it unlocked without any carrier and sell it in apple store. it will sell like hotcakes if it will be good.
Rating: 4 Votes
16 months ago
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.)
Rating: 4 Votes

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