Looking at global unlocked smartphone prices, research firm Piper Jaffray is now even more convinced that Apple will launch a low-cost iPhone later this year.
Apple may introduce a new handset built specifically to compete in the untapped market, which could be worth $135 billion in 2013, based on estimates.
Piper Jaffray analyst Gene Munster followed up on his early January report on Tuesday, Feb. 19, reiterating his belief that Apple will likely launch a more affordable iPhone for developing regions such as China and India.
"We believe a lower priced iPhone will be a positive for AAPL shares for two reasons," writes Munster, as cited by Apple Insider. "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."
Meanwhile, Morgan Stanley analyst Katy Huberty believes that Apple could triple its market share in China with a low-cost iPhone Mini. According to Huberty, Apple would add as much as $2.4 billion in iPhone revenue and triple its number of prospective customers in China alone with a handset priced at $330.
That price would be in line with flagship models from Huawei, Lenovo, ZTE and Coolpad, which range in price from 2,000 RMB to 4,000 RMB. Such a price would raise the number of Chinese citizens who could afford an iPhone from 10 percent to 29 percent.
Returning to Munster's forecast, he makes a snapshot of the low-cost segment by considering available pricing in six international markets: Germany, UK, China, France, Brazil and India. According to him, the iPhone 4 is the lowest cost iPhone, but it's still 133 percent more expensive than the global average for a low-end smartphone, which means Apple is only hovering over the top of the market.
Apple's other smartphone models are even more expensive. The iPhone 5 is 19 percent more expensive than comparable handsets from rival manufacturers, while the iPhone 4S costs 48 percent more than mid-range devices. Consequently, Apple's biggest gap in pricing is between the low- and mid-range segment.
"The low-end segment is important given we estimate it is a $135B market in 2013 that Apple is currently not participating in," explains Munster, noting that the sector will account for 60 percent of smartphones: 540 million units at a $250 average price.
China and India are core markets, and the cost of an average low-end handset in these regions is $138 and $140, respectively. The iPhone 4 costs roughly 265 percent more in these countries.
Munster expects Apple to launch a low-cost $199 iPhone in the September quarter, and says the company could sell roughly 37 million units by the end of 2013. The figure would climb to around 96 million units for 2014 and 170 million units in 2015. Various rumors indicate that Apple is working on a more affordable device for emerging markets, building the handset from low-cost materials such as plastic.
© Copyright 2020 Mobile & Apps, All rights reserved. Do not reproduce without permission.most read
related stories
more stories from Mobile
Experience AI-enhanced One UI 6.1 on your Galaxy Z Fold 4. Upgrade now for smarter interactions and enhanced user experience!
ernest hamiltonBumble's dynamic shift: Women no longer need to make the first move. Explore automated conversation starters and new dynamics!
ernest hamiltonDiscover the latest leaked specs for the Sony Xperia 1 VI, including cameras, chipset, and battery details. Stay updated!
ernest hamiltonThe Rabbit R1 appears to be just an Android app, despite earlier speculations. Read more about Rabbit's denial.
ernest hamiltonGoogle introduces a playful twist to calls with audio emojis, including a fart button. Discover the fun!
ernest hamiltonDiscover how Apple's Safari AI upgrade is revolutionizing browsing. Click to stay ahead with the latest tech insights!
ernest hamiltonStay updated on Apple's efforts to fix iPhone alarm silence bug. Read more for the latest on this critical issue!
ernest hamiltoniOS 17.5 introduces the 'Repair State' feature, ensuring 'Find My' remains active during iPhone servicing. Stay updated on this essential update.
ernest hamilton