Sunday, November 25, 2012

MUNSTER: Apple Will Launch A Cheap iPhone In ... - Business Insider

Apple analyst Gene Munster put out a note with a few interesting predictions in it this week.

We've already covered one of them: An Apple TV coming in November of 2013.

Here's another one: A $200, unsubsidized iPhone, coming in 2014.

In the U.S., if you buy a new iPhone 5 it costs $200 because the carrier is footing the majority of the bill for you. You pay $200, but Apple collects ~$600. That carrier covers that $400 gap, and hopes to make the money on your data charges.

That system doesn't work in places like India and China. And that's why Apple's market share is tiny in those countries.

If it doesn't want to lose access to the next three billion smartphone buyers, it needs to solve this problem.

Munster thinks Apple's solution is a less expensive version of the iPhone in 2014.

He doesn't elaborate too much on this phone, but we'd posit that it should not just be a last-generation iPhone. We think Apple should make a unique phone that it sells for less.

Right now, when it rolls out a new iPhone, the previous models get $100 chopped off, so you have the iPhone 5 at $200, the iPhone 4S at $100, and the iPhone 4 at $0 with a carrier subsidy. All three phones are great, but there's something psychologically unsatisfying about buying a three year old phone.

Apple has never sold a "cheap" anything. It is a premium company that believes in charging a premium for its products.

Just look at the iPad Mini. The world was expecting it to be $250 at the most so it could compete with the Kindle Fire HD and Nexus 7, which start at $200. Instead, Apple charged $329.

If Apple is going to sell a $200 phone, it's going to take a major change in corporate philosophy. But, the company has a new CEO in Tim Cook. He might think different about Apple's pricing.

Don't Miss: The Next iPhone Could Be Here Early

Source: http://www.businessinsider.com/munster-apple-will-launch-a-cheap-iphone-in-two-years-2012-11

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