News Column

Apple Said to Be Working on Cheaper iPhone

Jan 9 2013 5:01PM
Apple iPhone

Apple is working on a lower-priced iPhone to help it fight back against lower-priced competitors who are eating in to its market share, the Wall Street Journal reported Wednesday.

The report said that the cheaper iPhone could launch later this year and would likely feature a less expensive body than the machined-aluminium case that is one the current iPhone's signature features.

Apple needs a cheaper phone to help arrest its slide in the world smatrphone market, where its share of sales has fallen to 14.6 percent in the third quarter of 2012 from 23 per cent in the fourth quarter of 2011, according to IDC.

But the cheaper version would violate one of the central strategies of the company developed by Steve Jobs, who insisted on restricting Apple's model line-up to a minimum of devices in each category, with a focus on high-end products.

The company has always offered only one new iPhone model at a time since the launch of the first iPhone in 2007, though it does continue selling older models at a discount. The iPhone is Apple's top earner, accounting for 48 percent of Apple revenue in the last reported quarter, according to the Wall Street Journal.

In the US the phone retails for $649 without a contract, but most customers buy the phone together with a two-year contract which puts the up-front price of the entry-level iPhone 5 at $199.

This is considered too much for most customers in China and other developing countries which will represent the biggest growth markets for smartphones in the coming years.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH