Analyst Gene Munster believes that Apple will launch an unsubsidized iPhone in 2014, to challenge the thousands of different products in the Chinese Market.
According to Business Insider, the move to a cheap iPhone would be both a wise and much-needed strategic for Apple, with worldwide slowing in iPhone sales growth. A cheap iPhone targeted at emerging markets may provide Apple with substantial lift them for another couple of years. The price drop would also make the Chinese Market more open to the iPhone, a country where the average salary is considerably lower than in the Western world and cheap smartphones dominate.
Phone price subsidizing in China is not a popular solution and network operators only allow you to purchase a phone at its pay-as-you-go value. That means the iPhone is the price it would be off-contract, even with a contract.
At around ¥50000, the iPhone 5 is certainly not the cheapest device on the Chinese Market. Where other companies like Samsung have worked around this by offering other devices for cheaper in China, Apple have not yet done much to convince the Chinese market of the iPhone 5.
Right now, Android have a 90% grip of the Chinese market in terms of what operating system they are choosing to use on smartphones. This is bringing good profits for Google on their mobile content and China seem to have plenty of mobile options from the various Android partners.
We are unsure if Apple will make a cheap iPhone – it would be contradictory to everything the Cupertino giant has done previously and they always sell products at a good profit margin. We believe if they were to make an iPhone at this price, it would be specific to the market, and possibly only available in China.
A Telegraph article from a while back looked at the iPhone 4 and said the price for making one of these smartphones was around £121, meaning that Apple were raking in a good £300 profit from every device sold. This means that Apple may be able to work this off without losing any money.
Do you think a cheap iPhone is on the cards? Let us know your thoughts in the comments below.