Low Cost iPhone: When it comes to rumors surrounding a lower-priced Apple Inc. (NASDAQ:AAPL) iPhone, a lot of people claim to have an inside scoop. Of course, with so many rumors floating around it is difficult to determine fact from fiction.
A couple months back, analysts at the investment research firm Topeka Capital were able to take a closer look at several iPhone prototypes. At the time, this raised suspicion that a lower priced model may be released to the public in the near future. Now, it appears that the insiders at Topeka Capital feel even better that this is coming in the near future.
Brian White had the following to say in a research note, as published by AppleInsider:
“In late December, our research uncovered iPhones in different screen sizes for potential launch in May/June, allowing Apple to better bifurcate the market and pave the way for a lower-priced iPhone.”
According to White, it looks like Apple Inc. (NASDAQ:AAPL) would be releasing this new smartphone as a means of attacking two different markets – this time around, consumers interested in a lower-priced alternative.
So, what does White say about the actual price? After all, “lower-priced” can mean a lot of things to a lot of different people:
“We believe a $250 to $300 price point for a lower-priced iPhone would make sense and 58% below the $649 price point for an unlocked 16GB iPhone 5. A $250-$300 price range would also be competitive with China-based Xiaomi that offers a high-end phone experience at a mid- range price of ~$320 in Chinas.”
While some may believe the price to be too low, even a gross margin estimated in the range of 10 to 15 percent lower than the existing smartphone would leave Apple Inc. (NASDAQ:AAPL) with room to expand into other markets, including China.
Finally, White addressed the issue of how Apple Inc. (NASDAQ:AAPL) would be able to cut costs on a lower-priced iPhone:
“The case would be an interesting area of cost savings with a lower priced material (e.g., plastic) versus the aluminum unibody casing on the iPhone 5, while adding colors to excite consumers.”
Do you believe this rumor? Do you think Brian White of Topeka Capital has any idea of what may be coming in 2013?
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DISCLOSURE: I have no positions in any stock mentioned.
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