The iPhone vs cheaper Android competition is heating up, one analysts is confident there will be a cheaper iPhone while another analyst fears Apple profit loses.
Topeka capital Markets' Brian White said he is "confident that a lower-priced iPhone will be launched by Apple in 2013, possibly as early as June.” Some are calling the iPhone mini or iPhone Air. He claims that the iPhone will have a $250-$300 price tag or 58% below the current $649 for an unlocked iPhone 5. He expects the new cheaper iPhone will help expand Apple's market share in emerging markets, but will only deliver margin 10-15% lower.
Hey wait what's going to happen to Apple stockholders?
Andy Hargreaves at Pacific Crest warned investors that a cheaper iPhone could do potential long-term damage with Apple's margins at $70 per iPhone and reported that “Apple could build a low-cost iPhone of reasonably acceptable quality for less than $180.”
On top of that its brand equity would be downsized. He thinks Apple shouldn't risk it reputation as a high-end premiere brand by trying to compete in cheaper emerging markets. He also noted that the high-end smartphone market is finite and near saturation. Apple would be "would be much better served by continuing to focus on capturing and maintaining share of the most profitable customers in the world rather than moving down market, even if it means sacrificing unit and revenue growth.”
Previously, there were reports that the iPhone 5S would be an Franken-iPhone made with parts of past models, and iPod touches. Many believe the cheaper models will not be sold in the United States.