Initial budget iPhone volumes could be modest

By , May 3, 2013

Budget iPhone (Nickolay Lamm and Matteo Gianni teaser)

Look, DigiTimes is far from being accurate, but this Asian trade publication is nevertheless well-connected and occasionally accurate. According to its Friday report, Apple could initially launch a rumored less-pricey iPhone in small volumes, pegged at no more than three million units during its first quarter of availability. The publication speculates Apple could release the budget iPhone in small volumes in order to “test market response”

According to DigiTimes:

Speculation currently circulating in the iPhone supply chain in Taiwan indicate that Apple plans to launch an inexpensive model targeting emerging markets with initial quarterly shipments of only 2.5-3.0 million units to test market response.

The report goes on to reiterate previous claims of a four-inch LTPS screen and a cost-effective plastic chassis for low-priced iPhone. The sources added that the device will be powered by Apple’s A6 processor that debuted on the iPhone 5, “optimizing the high yield rates of mature components.”

Per usual, take anything DigiTimes says with a healthy dose of skepticism.

Launching anything in small volumes would be out of character for Apple.

The company carefully chooses which markets to participate in, but once it makes its decision, Apple makes as much products as it can though that usually isn’t enough to meet high demand.

Also worth mentioning: the budget iPhone is supposed to target emerging markets and improve Apple’s standing amid the onslaught of inexpensive Android tablets.

Budget iPhone (Martin Hajek 001)

And by emerging markets we mean India, Brazil, China and Russia, collectively home to nearly three billion people. “Testing market response” across such densely populated markets certainly would require way more that three million units – Apple’s channel inventory is greater than that!

Unless, of course, Apple is facing challenges with high-volume production of the budget iPhone.

That’s the word the accurate Apple analyst Ming-Chi Kuo of KGI Securities recently shared. He said the device is likely to be pushed back because its slimmer-than-usual polycarbonate casing is proving more difficult to produce than initially thought.

“The slimmer casing may make it more difficult to ramp up production yields of coating and surface treatment, and could slow down the shipment timetable,” Kuo wrote in a recent note to clients.

  • Share:
  • Follow:
  • Gorgonphone

    THE “BPHONE”…LOL B is for budget or boring??? hmmm

    • Gorgonphone

      and yes in apple fan boy… but i am also a realist

  • @dongiuj

    Personally, i think that top picture with transparent casing looks crap. But the red one? Well that looks alright!
    Just my opinion though.

    • wheebang

      I was thinking the opposite. The transparent is retro imac style, but Apple has never made a red device before, and is too ‘loud’ for my taste.

  • http://www.facebook.com/AryaKalashi Arya RealDream Kalashi

    So they want to make a budget phone, why not sell then iPhone 5 for the price it cost to manufacture it? = 238$

    • RagingBull

      Do you really think that’s a legit option?

      • http://www.facebook.com/AryaKalashi Arya RealDream Kalashi

        I belive that 304$ Would be a very good prise for the budget phone who should have the same specs as the iPhone 5.
        It isn’t budget just because it’s ugly.

    • guito mendez

      Or if people want a cheap iPhone just buy the iPhone 4 its 0$ with 2 year contract!!!

      • http://twitter.com/IBLeeDSWaGGa Juan Herrera

        but buy one off contract.. its retail worth is still actually hundreds.. Apple products retain value even after years..

      • wheebang

        They do, but not too much value any more. If you look on ebay, the 3GS, which is a wonderful phone, is going for a hundred bucks or less for “like new” devices.

      • http://twitter.com/IBLeeDSWaGGa Juan Herrera

        That i agree on.. but i turned in a 3gs at sprint for a 4s and still got $2 bucks more than a Galaxy s2 which is much newer. On eBay, the 4 is still around $200 refurbished. That’s still the street value of the 4 used that i’ve come across many times. In september, i got over $250 dollars for my 4s through sprint.. I paid nothing for the iphone 5. They actually owed me about 40 bucks

      • wheebang

        I am not sure about the carriers as I always buy my phones factory unlocked, and without contracts. Just looking now, it seems the factory unlocked, ‘like new’ (or new) S2 devices go for about $340 on average on ebay which is pretty good for such an old device being able to sustain over 50% of it’s initial value.

        Personally, I would never buy my gear from ebay, but it’s nice to see what the market demand is.

      • http://twitter.com/IBLeeDSWaGGa Juan Herrera

        yeah definitely. I don’t shop eBay for used tech.. just minor stuff.. I did see the s2 for about $340 also.. i guess a good chunk of that would be because of the factory unlock. Still in all, it is interesting to see the market demand as you stated.

    • Ben

      Because they wouldn’t gain anything from it.

  • http://www.facebook.com/jamesheckiii James Heck III

    When/If Apple release a “more affordable” unsubsidized iPhone, it will most likely be produced as fast as they can make them. I’m not buying the “test market” hypothesis at all.

    The whole point of said iPhone would be to make up for the lower profit margins with increased volume.