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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