Budget iPhone coming in 2014? Apple's great temptation

Budget iPhone coming in 2014? Apple's great temptationSay what you like about the Apple iPhone, but it isn't exactly cheap. And yet Apple can't seem to make enough of the things, and each new release sees a repeat of the usual stock shortages and queuing-round-the-block madness that are now par for the course for an iPhone launch.

So why, then, would Apple be considering launching a budget edition of its wonder-phone, one that will retail for as little as £125, or so the theory goes? Simple – because you and I don't matter any more.

Or not in terms of the growth of the smartphone market. You see, we're already all using the things, and the established order has been, well, established.

In China, meanwhile, it's estimated that there are currently 200 million smartphone users. By the end of 2013? 500 million. And it's a market the iPhone's pricing model isn't built for.

And so Business Insider is reporting well-known Apple analyst Gene Munster as predicting the 2014 arrival of a new iPhone built for emerging smartphone users in China and India – one that will cost around the same outright as the current iPhone does with a price plan.

Let's look at things a little closer: in terms of the current iPhone, the pricing model goes something like this: consumer signs up for an iPhone, paying Apple about a third or a quarter of the price of the phone up front. Provider pays the rest, and makes its money back through mobile data costs over the next 18 or 24 months.

In India and China, where the majority of global smartphone market growth will take place in the next year or two, things have developed so rapidly that smartphones haven't first become established as luxury devices like elsewhere – the overwhelming majority of users would be priced out of such a market anyway.

Instead, the smartphone market has grown on the back of affordable smartphones – primarily Android devices – priced around the £100 mark outright. It's no surprise, then, that Apple is currently a niche player in China and India, and is likely to remain so as things stand.

With all that in mind, it's hardly the work of genius to predict Apple might look to change things at some vague point in the future. After all, if a cut-price iPhone doesn't materialise 18 months from now, it's hardly like Munster will be ridiculed for making such a vague prediction so far ahead of time.

The issue is more about a simple choice lying before Apple. Its remarkable run of success in recent years has centred around the iPhone – a premium product delivering premium profits. Does it stick to that model and effectively yield emerging markets largely unfought, in so doing lowering its overall reach globally and making iOS a less attractive platform for third parties and developers?

Or does it go after markets like China and India with a mass market smartphone solution, knowing a knock-on effect on its image and existing pricing model in developed markets is unavoidable, but willing to give that up for increased numbers overall.

One thing is certain – Apple can't have it both ways.

Read more about: iOSApple iPhone 5

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9 comments

JanSt / MOD  Nov. 26, 2012 at 11:45

Yes - it would appear to be a no-brainer - sell a cheap version, and milk the buyers through iTunes. Only: Windows is on so many PCs because you can buy them for less than a Playstation or midrange Android phone or a bad night out on a weekend... That never made Apple decide to sell a cheap netbook, did it? On the other hand, yes - their are iPod Nano and Shuffle... Hmmm... But there's a lot less to go wrong with those - no antenna to mess up etc etc.

We had the budget 3GS rumour around the time of the iPhone 4S. That totally happened, didn't it?

Personally, I doubt it. But then: the iPad Mini is a bit of a budget compromise.

Pondlife  Nov. 26, 2012 at 12:11

"Say what you like about the Apple iPhone, but it isn't exactly cheap. And yet Apple can't seem to make enough of the things"

No shortage of them after about a fortnight...

Budget iphone bring back the rokr ;)

Dougal1709  Nov. 26, 2012 at 13:36

They can't even manage to get the same amount of functionality as an Android with a £600 phone. I'd be amazed if the £125 one even comes with a screen

Pondlife  Nov. 26, 2012 at 13:40

an iphone shuffle you mean, seems an interesting idea.

JanSt / MOD  Nov. 26, 2012 at 14:15

@dougal It's a different OS - can't we get over that?
Linux and Mac can do things Windows can't ... A BMW can do things an Audi can't etc and, in ALL cases: vice versa!

mug4k  Nov. 26, 2012 at 15:23

an iphone shuffle you mean, seems an interesting idea.

lol, it'll be pot luck whether your able to call/text the right person.

matt101101 / MOD  Nov. 26, 2012 at 15:31

A BMW can do things an Audi can't
Apart from having that crap iDrive computer system which confuses even me and looking so ugly they make small children cry, what do these BMWs you speak of do so well ;)?

Car fanboy war time :p.

Pondlife  Nov. 26, 2012 at 16:32

Sell?

AhmadCentral  Nov. 26, 2012 at 17:02

Ipad nano rumoured to launch next month
iPhone (iPad edition) to be relesed next year
New iMacs to include 55" Retina display
"New iPad" to be called The "Newest iPad"
iPod Touch 5" edition coming soon...

yada yada yada

I bet one of those headlines will be real soon enough...

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