Apple May Launch A Cheaper iPhone Soon: Reports

By Sumit Passary | Dec 19, 2012 11:03 AM EST

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The latest iPhone 5 is following on the footsteps of its predecessors when it comes to high demand and popularity, but what if a cheaper version of the iPhone is launched? A report from Piper Jaffray indicates that Apple may launch a cheaper "iPhone for the masses."

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iPhones need no selling and all iterations of iPhones have been well-admired by iFans and tech gurus alike. However, the price of the smartphone may be a constraint for many potential buyers as the iPhones are not easy on the pocket.

The smartphone market has been growing rapidly and gadget makers like Apple, Samsung, HTC, LG, et al are taking full advantage of the present demand with the introduction of their latest handsets. However, Apple's line up of iPhones are limited to only a few, whereas other manufacturers like Samsung, HTC, Nokia, etc. have an array of smartphones on offer to meet the demands of various market segments, specially the price of the handset.

"We believe the delta between smartphone market growth and iPhone growth will push Apple to release a lower priced device despite comments to the contrary. Looking back historically, Apple always priced Macs as the higher end of the market and ultimately the iPad, and now the iPad mini, became the Mac for the masses," said Gene Munster an analyst with Piper Jaffray.

Munster believes that an "iPhone for the masses" is an inevitable device from the company. The analyst reported that the smartphone market grew 45 percent year over year in Q3 2012. iPhones sales estimation for the holiday quarter is around 45 million units, which means a 23 percent growth from the last year.

If Apple introduces a low-cost iPhone then the devices will be able to compete with inexpensive Android devices currently available in the market.

Munster opines that Apple could reduce the price of its existing iPhone, which will enable the company to aggressively penetrate deeper in the smartphone market. The reduction in price of the iPhone will mean that a compromise may be made to the components of the handset. Munster feels that Apple could make small changes like an iPhone without a Retina display and maybe minor components change which will make the iPhone available at a lower price.

Another analyst, Ben A. Reitzes of Barclays Capital, also reported that Apple may expand its iPhone line-up with the introduction of an entry-level smartphone.

We will have to wait and see if Apple launches a relatively cheaper iPhone to suit the pocket of the masses.

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