Budget iPhone (Nickolay Lamm and Matteo Gianni teaser)

Speaking at his company’s shareholders meeting on Thursday, Pegatron CEO T.H. Tung made some interesting comments on Apple’s often rumored ‘budget iPhone.’ He said don’t expect the handset to be inexpensive, as the “price [on it] is still high.”

For those unfamiliar with Pegatron, it’s a manufacturing company and one of Foxconn’s biggest rivals. The CEO’s comments seem to confirm earlier reports that Apple has chosen the company, over Foxconn, as its primary budget iPhone maker…

Japanese blog Macotakara (via AppleInsider) points to Tung’s comments in a report by the China Times. The news outlet says that the executive told investors today that products currently on the market can carry a number of names, but “cheap” is not how he would describe the low cost iPhone. He went on to say that smartphones are increasingly offering more value for the money.

This isn’t the first time that we’ve heard Apple’s budget handset characterized as “not cheap.” Last month, AllThingsD shared a note from analysts Gokul Hariharan and Mark Moskowitz saying they felt Apple’s low cost iPhone could come in at $350.

“We believe Apple could take 20-25 percent of this market in the next 12 months (from almost no market share currently), if it prices a lower-priced product at $350-400 levels.”

And I don’t think it would surprise anyone to see Apple price its so-called low end iPhone at $350 or higher. Apple doesn’t typically undercut its competitors on price. Just look at the iPad mini—people thought Apple was nuts for starting it at $329.

I think this comment Tim Cook made while speaking at this year’s Goldman Sachs Technology and Interactive Conference sums it up best:

Our North Star is making great products. We wouldn’t do anything that’s not a great product. It’s not why we’re on this earth.

We wouldn’t do anything we don’t consider to be a great product. That’s just not who we are. That said, if you look at what we’ve done for people who are price sensitive, we’ve lowered the price of the iPhone 4 and 4S as of last September, and last quarter we didn’t have enough supply of the iPhone 4. It surprised us.

Also take a look at the history of iPod. When we started, it was $399. Now you can get an iPod shuffle for $49. Rather than cheapening, we build new products with a separate experience.”

There’s been a lot of talk about Apple offering a budget iPhone in recent months. Just last week, Reuters ran a report claiming that it was on track to release the cheaper handset this fall alongside its iPhone 5S, and test production was going to start in July.

As for the phone itself, it seems like we have a pretty good idea of what it’s going to look like. It’ll be shaped like the iPhone 5, with the curved corners and other elements of the iPod touch. And several reports have said it’s going to come in a variety of colors.

There’s obviously no way to know for sure, but many industry insiders and pundits are expecting Apple to launch the low cost handset alongside a new flagship iPhone, the 5S, and two new tablets this fall. Like last year, it’s going to be a busy holiday season.

  • Guest

    I want the iPhone not a iPhone

    • Gerry

      Step 1 Comment a previously top comment
      Step 2 Commit a grammatical error. “an”
      Step 3 Achieve awesomeness and originality

      I slow clapped while reading your comment 🙂

      • felixtaf

        Step 4 – Delete the comment after someone realizes that its a COPY!

      • bigzjoseph

        wow that’s deep

  • Ratatata

    Bagra! 🙁

  • Willie

    A budget iPhone doesn’t mean it would come cheap.. It’s affordable based on the materials and hardware.

  • In other words, a budget iPhone is just more affordable to Apple, not to consumers…

  • genXhippie

    Everything Apple produces is expensive, nothing new here.

  • Rowan09

    $350 for an iPhone is cheap. I don’t know if everyone is from America in the comments section but the 5 is over $600, S4 the same, etc. $350 for any luxury phone is cheap. What do people consider cheap realistically?

    • Yunsar

      Haha over here in Australia it starts at $799 for an iPhone 5 through Apple

  • Don’t wannatell

    Not surprised at all. Everything from Apple is expensive. Don’t ever expect it to be cheap plastic as android devices.

    • blastingbigairs

      Although I prefer Apple products myself, don’t just assume Android = poor build quality. The HTC One is built like a tank and actually looks and feels beautiful, not to mention the front facing stereo speakers sounds amazing. Apple really could step it up a bit when it comes to build quality themselves.

      • Simche Apple Konstantinovic

        iPhone 4 was ‘start’ of a really good build quality for smartphones. Where was HTC and rest of the Android-Glories 2010? Agree though, HTC One is beautiful 🙂

      • blastingbigairs

        Actually the start was the HTC HD2, but unfortunately it was a Windows phone. That thing was all metal and very well built when the iPhone 3G was still all plastic. The original iPhone was all metal too, which I thought was brilliant. Oh we’ll what can you do?

      • BoardDWorld

        Actually it was the iPhone 2G.

      • Kurt

        I like the galaxy note tab, with the front facing speakers. I hope the ipad 5 will have that. why 1 mono speaker on the side? Thats inferior build quality

      • BoardDWorld

        You need to look at how the speakers work… The tech was first introduced in the iMac. You can keep your ugly front facing speakers.

      • Kurt

        iMac came before TV’s? Awesome…GO APPLE!

      • Maxim∑

        HTC is the only android manufacturer I know that makes well built products for there high/mid end phones not just the HTC One M7 but many others. If I wanted to buy an android phone it would be HTC or Nexus for sure. And a HTC Nexus would be nice 🙂

        I don’t understand why Apple would need to step up there build quality when its already top of the line? iPod 5 is really nicely built same with iPhone 5 and all the Macs

      • blastingbigairs

        Sorry I should’ve been more clear, I meant Apple needs to step up their design when it comes to speakers on all the idevices. The single mono speaker on the bottom or on the side just doesn’t cut it anymore. The sound quality of the HTC One speakers are bar none the best speakers out right now for a cell phone. I agree with you though, the “overall” design of the iPhone 5 is much better than any other phone.

      • mehrab

        Yeah the htc one isnt the best built. The best android ofcource but the iphone 5 has stereo speakers altho the htc ones are better. The iphone 5 has brushed aluminum, two toned back,the second best smartphone speakers,crystal lens cover,dimond cut chaffered edges and the glasses you see on the top and bottom of the iphone 5 is chosen from 700 pieces per iphone. Oh btw the iphone 5 is thinner and lighter. The htc kne is pretty good But its a little two edgy horrible hardware button placements i sometimes type/play games on flat surfaces which will be obsolete on the htc one

    • Kurt

      Ill take plastic over metal. (glass is my first choice) just look at the iphone 5. Terrible. It scratches so easily, gets dent so easily and worst of all BENDS! youtube and search ‘bent iphone 5’

      glass is best, then plastic, then aluminum and other metals

      • The only way anyone could convince themselves that plastic & glass > aluminium, and try to justify that argument with ‘strength’ is for them to be a hardcore fanboy.

      • ✪ aidan harris ✪

        Precisely. I haven’t done my research but the last time I checked even if aluminium bends, plastic melts and cracks and glass shatters…

      • I think if I dropped a galaxy, the plastic is more likely to crack/fissure than my iPhone 5 is to bend.

        Nevertheless, it will be interesting to see Kurt eat his words and backtrack like a typical fandroid when Samsung’s Aluminium Galaxy S5 is released

      • Kurt

        Try to bend my 4S…you can’t….try to bend the iphone 5, you can.

        how will eat my words when you look like a fool. haha

      • Kurt

        “Precisely” nice…when has the iphone 4 ever bent? oh? what whats that? …aluminum is worse. go to youtube and see the videos…haha and you said “Precisely”

      • ✪ aidan harris ✪

        Correct I did say “precisely”. I also said that I hadn’t done my research however noted the findings that I last knew of. Yes some people’s iPhones have bent although I do not think this is a widespread problem.

    • Gorgonphone

      apple best deals and bang for bucks are mac mini… imac.. and 13 in macbook pro..

    • Not all android devices are plastic. See the HTC One.

  • Gorgonphone

    lol duh… apple will over price it but make folks think they are getting a deal..lol

    • quitcherbichinn

      and you are expecting what? a smartphone that cost $99? the parts alone to build it cost that are near that then you have to factor in R&D, packaging, shipping…a lot of factors go into pricing a product. no android phone costs that little. they may be sold for that or given away for free, however the business you are buying it from is losing hundreds of dollars right out the gate, hence the 2 year contract to recover that loss and still make a profit.

      i hated trying to explain this to people when i worked for Sprint. when you see the phone advertised as “free with 2 year contract” or “$49 with 2 year contract” or w/e pricing you see…that is not the actual cost of the phone. people have the toughest time comprehending this especially when they break their phone and have to buy a new one at actual msrp. they flip out because the initial phone cost them $100 but now they have to spend $600 to buy a replacement of the same phone. they cannot comprehend that the business already lost $500 on the first phone and they are recouping it by way of your plan but now if they give you a second one and eat the full cost of the phone they are now $1000 or more in the hole.

      i’ve strayed from my point a bit but it all goes with the topic given the real point is…businesses exist to make profit. no person and no business works for free or at a loss and if they do then they are idiots and will quickly go broke or bankrupt/out of business.

      an iphone 5’s real price is $649+ depending upon model so if a “budget” iphone comes out costing $349 then you are already saving money, though it will be at the sacrifice of features or processor or w/e. you can’t have your cake and eat it too….if you want the ferrari then you buy the ferrari….if you can’t afford the ferrari then you don’t get a ferrari.

      it just gets old with all the whining from people. no matter what this company does the supposed fanboys and customers whine. no one is ever happy. whine whine whine. the level of entitlement coming from these comments is painful. you aren’t owed anything so stop crying about why you can’t have whatever you want or the price being too much. no one is forcing you to buy anything…though Apple will still sell MILLIONS.

  • you_fook

    Samsung chips are in iPhones, iPads, and iPod Touches.