Can Apple Inc. (AAPL) Make Any Money on this Potential Device?

Page 1 of 2

It is easy for Apple Inc. (NASDAQ:AAPL) fans to talk about a cheaper iPhone and what it could do for the company. It is easy for these people to imagine the possibilities. However, there is much more to this than meets the eye.

You have to consider the fact that Cupertino is looking at all its options from a variety of angles, including the financial implications of such a product.

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsEven if Apple Inc. (NASDAQ:AAPL) determines that it can make money by selling a cheaper iPhone, there is something else to keep in mind: Cupertino is never going to release a product that is not up to its quality standards. Don’t expect the company to lower its overall quality just to sell a cheaper phone. This is not what Apple has ever been about, and we should not expect this to change at any point in the near future.

The real question is this: would Apple Inc. (NASDAQ:AAPL) be able to make money on a cheaper iPhone?

To answer this question, we are going to take a closer look at a recent Bloomberg Television “Bloomberg West” segment. In this segment, Cory Johnson talks about the possibility of a $99 iPhone and what it would mean to the company. More specifically, he looks into whether or not Cupertino would be able to turn this into a profitable endeavor.

Here is what he had to say:

“To be clear, the phone they sell on the street for $299 is the phone they sell to carriers for about $650 bucks. Is it possible, and that is the ultimate question here. When they came out with the iPhone 5, we were all excited about the announcement…”

Soon enough, Johnson began to discuss the finer details of a cheaper iPhone:

“The notion that they can offer the Apple experience with a cheaper phone is hard to imagine.”

All in all, Johnson is hard pressed to believe that Apple Inc. (NASDAQ:AAPL) would be able to release a cheaper iPhone and still make money on it. Does this mean it is impossible? Definitely not. But he has taken a solid look at the numbers and doesn’t see how it can happen.

If you want to watch the video in its entirety, you can do so on the following page. From there, be sure to share your opinion in the comment section:

Page 1 of 2