When Apple introduced iPhone 5, it decided to discontinue the iPhone 3GS replacing it with iPhone 4 as the company’s new entry-level offering. Charlie Wolf with Needham & Company has now released a statement that Apple might introduce an inexpensive iPhone model to address developing markets, though he doesn’t think that will happen anytime soon, Apple Insider reports.
Wolf believes that since prepaid markets are now growing faster than postpaid markets around the globe, it’s an “open question” whether the high priced iPhone can continue to gain market share as unlocked smartphones can start at prices as low as $150 in some developing countries.
Wolf believes Apple could have addressed prepaid markets by keeping the iPhone 3GS available at a lower price. Previously, the smartphone first released in 2009 was available for free with a two-year contract, but the iPhone 3GS was replaced by the iPhone 4 last month.
Earlier this year, China surpassed the U.S. and became the largest smartphone market in the world. Because China and other developing markets are predominantly prepaid, Wolf believes Apple has “little choice but to target prepaid markets in emerging regions.”
The unsubsidized price of the iPhone 4 is still $450 under a prepaid plan due to which Wolf believes it will be difficult for Apple to gain considerable traction at that price point with its entry level smartphone. However, for the time being Apple can still increase its market share through greater carrier penetration he added.