$300 budget iPhone due in June, analyst says

By , Feb 11, 2013

iPhone6-002

Topeka Capital analyst Brian White asserted Monday morning that a lower-priced iPhone could be introduced as early as this June. It will be sold unsubsidized for about $250-$300, he thinks, and suggests “iPhone Mini” or “iPhone Air” as names. Just as The Wall Street Journal originally reported, White expects the less-expensive iPhone to use a plastic body instead of metal and glass.

It would have a lower margin than prior iPhones though Apple could make up for the difference in sheer volume as carriers in emerging markets like China, Brazil and India could position the device as a competitive offering to local brands, like the Xiaomi handset which costs around $320 off-contract in China…

Of course, previous reports also indicated an early summer release for the rumored handset. Plus, we know Apple is seeking plastics design engineers for “new Apple product developments”.

Forbes relays White’s note:

A $250-$300 price range would also be competitive with China-based Xiaomi that offers a high-end phone experience at a mid-range price of ~$320 in China.

One analyst previously likened a much cheaper iPhone to the augur of a new era of lower Apple margins.

This is China’s Xiaomi handset:

Lei Jun unveils Xiaomi Phone 2

He also notes:

We believe a $250-to-$300 price point will allow Apple to significantly expand its reach in the smartphone market and better address developing markets such as China, while opening up more opportunities in Brazil, Russia, India and elsewhere.

The price sounds just about right.

An unlocked 16GB iPhone 5 costs $649, putting it out of reach of price-sensitive shoppers, with the price going way up in markets like Brazil and India due to taxes.

Budget phones vs iPhone/p>

Apple’s least expensive off-contract iPhone is the $450 iPhone 4.

Some folks may not be aware of this, but handsets in lots of markets outside the United States are sold for the full price, unsubsidized. This allows users to easily switch carriers by swapping another SIM card and activate pay-as-you-go prepaid minutes.

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  • http://twitter.com/klouud Timothy Polumbo

    But does anyone really buy an iPhone at full price and unlocked? I don’t know anyone that does this. An American knows that he/she is going to have to have a cellular carrier to use a phone – so it does not hurt to sign up for a contract… because… u need a carrier… so… whats the problem? The contract allows access to a subsidized rate when purchasing a phone. This “deal” comes around every 2 years when the contract is up for renewal. Since iPhones normally hold their weight for about 2 years… this is perfect.

    Why do we need a “cheap” iPhone? The i4 is $0 aka free with a 2 year contract. The 4S = $99 and the 5 = $199. How is that not cheap?

    • http://www.idownloadblog.com/author/dujkan Christian Zibreg

      Phones in most markets outside the US are actually sold unlocked and unsubsidized and separate of wireless plans, especially in China and emerging markets

    • http://twitter.com/kev0224 Kevin Lam

      Didn’t you read?
      This iphone is targeted for more developing nations (mainly china) than for US. The US mobile market is weird in that it is really the only one that subsidizes phones. Most other carriers in other countries don’t do this, they offer the phone at full price while giving cheaper rates (comparatively) in order to entice customers. In this way, a consumer can buy any phone and then can shop for a carrier because the phone is unlocked right away. Instead in the US, a lot of phones are tied to a specific carrier.

    • http://www.facebook.com/jamie.tilden.9 Jamie Tilden

      It seems cheap, but as you say, you’re locked to a contract and in the end iPhone users i4, 4S, 5, etc. pay thousands of dollars to keep their iPhones. Buying them outright isn’t a terrible idea. My friend did it with his 4S about a year ago because he was unsure of how his plan would work out. It cost him about $800. Very pricey indeed. With a budget iPhone, I can definitely see a lot more people owning iPhones, as gifts given to them, for instance.

    • http://twitter.com/nAcolz Acolz

      The rest of world buys unlocked iPhones.
      I have never had a locked phone for example and I don’t even know anyone who has. I am from Czech republic.

    • http://twitter.com/Al13Z Alexander magnusson

      I did buy an unlocked iPhone since i already had a 2 year contract but the phone it was on broke so i just got an unlocked iPhone 5. So the kind of reason for me is if i either would need to upgrade to a new phone within those two years or B changing carrier.

      • http://twitter.com/Al13Z Alexander magnusson

        Also in Sweden you dont get the phone for free if you sign a contract if its not a really expensive contract. Or your contract is running out and you get the phone if you sign for another 2 years. Otherwise you’ll have to pay almost the full price with a little discount in addition to the contract every month. Also if you’re travelling or moving to another country you dont need to buy a new phone if it is supported.

    • http://www.facebook.com/MoodiRMX Moodi Rmx

      i always buy my iphone factory unlocked, its way better especially if you travel or want to change from carrier to another

  • http://www.facebook.com/jamie.tilden.9 Jamie Tilden

    I know you guys keep using that particular mockup thumbnail for the look of the budget iPhone, but seriously, we all know it won’t look like that and absolutely won’t be running an iOS that so blatantly parallels OS X.

    • @dongiuj

      And if it does, won’t you feel like a twat sounding so sure of yourself.

      • http://www.facebook.com/fourinchworld Michael Scott Allen

        Good thing it never will. twat

  • http://twitter.com/klouud Timothy Polumbo

    Another issue I have with this is the market strategy that Apple has adopted – premium. Apple has basically created a recession proof model in which to operate – by making a “cheap” iPhone, they will be stepping outside of the realm of premium branding and entering the ultra-competative markets of the “race to the bottom” phones. I can see merit in trying to stay competitive in that niche, but its very un-Apple. I guess it really won’t affect me much – I need my phone to cary me for 2 years, so I’ll be getting the bleeding edge high end device regardless. Yes, I read the article and I apologize if I stepped on anyone’s toes – I’m not trying to be offensive.

  • iospixel

    What sort of performance should we expect from this chipwise…I hate to see it ship with the same benchmarks as a 4s.

  • Kurt

    So buy iphones in the US and sell them in Brazil, cool got it, thanks

  • http://www.facebook.com/fourinchworld Michael Scott Allen

    Never. Gonna. Happen.