Cheap Apple iPhone: There is no denying the fact that Piper Jaffray analyst Gene Munster strongly believes a cheaper Apple Inc. (NASDAQ:AAPL) iPhone will be coming to market in 2013. This is something he has discussed time and time again.
Yesterday, Munster took the time to once again discuss this possibility. According to a report by AppleInsider, here is what Munster had to say in a note to investors:
“We believe a lower priced iPhone will be a positive for AAPL shares for two reasons. First, despite its lower margin, it should accelerate gross profit growth given the size of the low-end market (we estimate $135B in 2013); second, investors have historically bought into AAPL ahead of major new product releases.”
While this is similar to what Munster has said in the past regarding a cheaper Apple Inc. (NASDAQ:AAPL) iPhone, he went a step further this time by taking a closer look at the potential in the low-cost segment of six international markets.
The article goes on to add the following:
“By taking available pricing in six international markets — Germany, UK, France, China, Brazil and India — Munster was able to come up with a snapshot of the low-cost segment. He notes that the lowest priced iPhone, the iPhone 4, is still 133 percent more expensive than the global average for a low-end smartphone, suggesting Apple is only skimming the top of the market.”
So, just how big is the low-end segment of the smartphone market? How much is Apple Inc. (NASDAQ:AAPL) missing out on by neglecting these consumers?
Munster added the following in his note:
“This low-end segment is important given we estimate it is a $135B market in 2013 that Apple is currently not participating in.”
Let’s put it this way: if Munster is correct in estimating that the market is worth $135B, Apple has quite a bit to gain by joining in on the action.
Munster still believes that a cheaper Apple Inc. (NASDAQ:AAPL) iPhone, meant to target emerging markets, will debut in the September quarter.
Do you agree with his assessment of the low-end segment? Share your thoughts in the comment section below.
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DISCLOSURE: I have no positions in any stock mentioned.
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