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Analyst Predict Launch of Cheap iPhone for 2014

By - Source: Business Insider | B 23 comments

Apple looking to increase its market share in China.

According to one analyst, Apple is expected to launch a cheap iPhone in 2014 as part of an effort to increase its market share in the lucrative Chinese market.

Gene Munster believes the company should launch a $200 iPhone handset in the region due to mobile operators in the Far East refusing to subsidize the current models. While consumers in other markets around the world have the option of purchasing the phone subsidized and on a contract, consumers in China must purchase the smartphone outright.

The firm said it would be wise for Apple to create a new variant of the iPhone for this market as opposed to heavily discounting previous models of the smartphone. Consumers have long and rightfully been complaining about the price tag placed on Apple products. Without a contract, devices such as the iPhone retail for over $500 in the U.S. or £529 ($846) in the United Kingdom. The iPad sports a higher price tag due to its 3G/4G capabilities.

Due to its various price points and range offered by vendors, Google's Android dominates 90 percent of the market in China. The average cost of an iPhone is 3.25 times higher than that of the average Android smartphone sold in the country.

While Apple has defended the iPad Mini's $329 price, Microsoft CEO Steve Ballmer has stressed that the Cupertino company charges too much for its products. Moreover, Apple is arguably charging premium prices for devices that aren't considerable upgrades from their predecessors. Apart from its increased length, the iPhone 5 doesn't really offer a worthy improvement to the consumer when compared to the iPhone 4S, while similar arguments can be made for the iPad line. When the iPad 4 was announced, owners of previous models of the device were understandably frustrated. The unveiling of the tablet came just six months after the release of the iPad 3.

Analysts have warned that innovation at the firm is "sputtering", while Apple's own co-founder has also expressed concerns regarding creativity at the world's richest company.

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Top Comments
  • 15 Hide
    shine8210 , November 27, 2012 11:17 AM
    Cheap? Iphone? Hahahahahaha Toms you so funny. You can't use those two words in the same sentence.
  • 14 Hide
    mrmaia , November 27, 2012 11:12 AM
    Another poor "analyst opinion"/Apple advertising article by Zak, even though it states the truth (iCrap is overpriced).

    Quote:
    Nearly 70% more expensive in 'Rip-off-Britan' that's no surprise.


    In Brazil the iPhone 5 is yet to be launched, but the 4S is sold for R$2000 (~$1000).
  • 13 Hide
    freggo , November 27, 2012 11:50 AM
    It's a friggin phone.
    If your self worth comes from the logo on the phone in your pocket you have problem.

    The bigger issue is that nothing from the Apple Universe plays nice with the rest of the world.
    And THAT is a reason (one of them) to stay away from their products.
Other Comments
  • 8 Hide
    Graham_71 , November 27, 2012 10:43 AM
    Nearly 70% more expensive in 'Rip-off-Britan' that's no surprise.
  • 14 Hide
    mrmaia , November 27, 2012 11:12 AM
    Another poor "analyst opinion"/Apple advertising article by Zak, even though it states the truth (iCrap is overpriced).

    Quote:
    Nearly 70% more expensive in 'Rip-off-Britan' that's no surprise.


    In Brazil the iPhone 5 is yet to be launched, but the 4S is sold for R$2000 (~$1000).
  • 15 Hide
    shine8210 , November 27, 2012 11:17 AM
    Cheap? Iphone? Hahahahahaha Toms you so funny. You can't use those two words in the same sentence.
  • 13 Hide
    freggo , November 27, 2012 11:50 AM
    It's a friggin phone.
    If your self worth comes from the logo on the phone in your pocket you have problem.

    The bigger issue is that nothing from the Apple Universe plays nice with the rest of the world.
    And THAT is a reason (one of them) to stay away from their products.
  • 4 Hide
    manicmike , November 27, 2012 12:03 PM
    Quote:
    Cheap? Iphone? Hahahahahaha Toms you so funny. You can't use those two words in the same sentence.


    rofl the iPhone is cheap. Or at least it should be, copyrighting a few nicknames for normal tech like a screen that has a "retina display" doesn't make the $500 phone any better than the $200 one, but sadly the average consumer is too simple minded to realize that.

    "This phone has an Ultron battery with an octo-touch screen and carbonized titanium alloy plating... And when I hold this square button, it tells me what a tool I am!!!"
  • 5 Hide
    Anonymous , November 27, 2012 12:06 PM
    Offering a cheap model might also affect Apple in bad ways:

    (1) The presence of a cheaper model might cannibalize its own premium phone sales, and hence, lower profit margin. In essence, cheaper model will trade profit margin for market share.

    (2) The current high share price of Apple is based on the assumption that the company will continue to have high profit margin while pushing the current level of volume, year after year. Reduction of profit margin may see market reacts by lowering share price.

    As a company with such a high market capitalization, Apple only has 4 product lines. This is a very dangerous situation for Apple as any failure in one product line will trigger share price drop. Apple should concentrate more on inventing more products, instead of keep refreshing existing products, to diversify the portfolio for revenue. If Apple has lost the will to invent, then they can try to get their hand dirty and buy over fabrication plants etc to actually make the parts that they need, and become a supplier of parts to other vendors as well. Apple cannot hope to stay on the top spot for long without making more products. Sooner or later the fans will realize the new models do not have enough improvements to upgrade and the sales will drop.
  • 3 Hide
    bllue , November 27, 2012 12:29 PM
    I hope the Chinese don't buy into the fad if this happens
  • 4 Hide
    garrick , November 27, 2012 12:36 PM
    Rumors have been floating around before the 4s launched that maybe Apple would come out with a cheaper iphone but nothing ever materialized from that rumor so I doubt Apple will go through with something like this.
    I hate Apple for overcharging customers not only for the products but for tech support which is ridiculously expensive to where you might be better off buying a new product instead of sending it in for repairs as they will charge you an arm and a leg for relatively simple repairs.
  • 4 Hide
    sonofliberty08 , November 27, 2012 12:43 PM
    i think they just mean more cheap quality, but not cheap price :) 
  • 0 Hide
    jacobdrj , November 27, 2012 12:48 PM
    They have a 'cheap' iPhone. It is called iPod Touch...
    When one 'grows up' and wants to be a 'big boy' they will upgrade their iPod Touch to a full fledged grown-up iPhone...

    If you think about it, it is a clever way to feed into the ecosystem while people are young and don't want to repurchase all of their software...
  • 1 Hide
    yialanliu , November 27, 2012 12:49 PM
    the idiot is an idiot who needs to learn to do research prior to making opinions.

    1) all 3 major wireless companies in China subsidize phones if you sign a contract.
    The problem isn't with companies, it's individuals who don't want to subsidize phones.

    2) Market research have shown that the price of the iphone in China is inline with other smartphones (Galaxy S3 or Lumia 920 for instance)

    3) Cheap iphones doesn't make sense. Apple doesn't make anything cheap, there's an Apple tax on all their products.
  • 0 Hide
    yeesh , November 27, 2012 1:14 PM
    yialanliuthe idiot is an idiot who needs to learn to do research prior to making opinions.1) all 3 major wireless companies in China subsidize phones if you sign a contract.The problem isn't with companies, it's individuals who don't want to subsidize phones.2) Market research have shown that the price of the iphone in China is inline with other smartphones (Galaxy S3 or Lumia 920 for instance)3) Cheap iphones doesn't make sense. Apple doesn't make anything cheap, there's an Apple tax on all their products.

    Wow, then there's a mystery here. What do you think is behind Apple's sub-5% market share, since their products have more cachet and you've just explained that they cost no more than the competition? That situation is very incongruous with the other markets where Apple does just fine. Are Chinese"individuals" just wiser than the rest of the world, or prejudiced against Apple, or less materialistic, or more savvy consumers, or what?
  • 2 Hide
    hate machine , November 27, 2012 1:24 PM
    Gene Munster is at it again... the guy with a hefty hard-on for Apple stock who keeps rabidly predicting an Apple iTV and a $1000+ stock price. Nothing to see here folks, this guy is rarely right about anything.
  • 0 Hide
    cats_Paw , November 27, 2012 1:29 PM
    In marketing apple is used as an example to prove that something expensive and crappy can be perfectly sold to people who wish to improve their status by having expensive things (normally applies more to women).

    Its no secret that more expensive does not mean better 100% of the times, yet a lot of people still play the price tag to impress others.

    I hardly care about Apple future plans as i do not buy their products, nor i invest in stock, so there shall not be an impact on my behaviour whatever they do.

    On a side note, people do a lot of stuff that makes no sence, so its not like this is something crazy :D .

  • 3 Hide
    Anonymous , November 27, 2012 1:34 PM
    I would like to see less articles with "analyst" in the title. They are almost never good. :/  Tom's can be better than this...
  • 0 Hide
    jn77 , November 27, 2012 1:46 PM
    What exactly is a "cheap" Iphone, I would expect right now (November 2012) that the $865 Iphone with 64gb of storage to really have 256gb of storage at that price.

    The 32gb Iphone would be the base model and a "Cheap" Iphone would be the 8 and 16gb models.
  • 1 Hide
    jn77 , November 27, 2012 1:50 PM
    If Apple keeps sueing Samsung..... a "cheap" Iphone will be $2000 with a 5 year contract :-)
  • 1 Hide
    dauntekong , November 27, 2012 1:54 PM
    $199 without contract, but a one time Apple activation fee of $699 is required to make calls. LOL!
  • -2 Hide
    RADIO_ACTIVE , November 27, 2012 2:25 PM
    Cheap and iPhone just don't belong in the same sentence...
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