Apple Considering $99-$149 Price Point for Cheaper iPhone says Bloomberg

Screen Shot 2013 01 08 at 2 40 49 PM

Hot on the heels of the WSJ reporting on Apple releasing a cheaper iPhone this year, Bloomberg is jumping into the mix with their sources claiming a price point of $99-$149 for a cheaper phone, according to sources:

Apple, which had been working on a more affordable smartphone since at least February 2011, is weighing retail prices of $99 to $149 for a device that would debut in late 2013, at the earliest, according to the person, who asked not to be named because the negotiations are private. Apple has spoken to at least one of the top U.S. wireless carriers about its plans, the person said yesterday.

Another source noted to Bloomberg the shift in strategy is an ongoing plan by Apple executives to enter the emerging markets with a cheaper phone using less-expensive parts. Sources also note the phone could be smaller than existing models and Apple is contemplating a model that could work on various wireless networks.

Back in February of 2011, Bloomberg also similarly reported Apple was working on cheaper iPhone models, with a price point consideration of $200 and size about one-third smaller than the iPhone 4.

Over at Business Insider, Piper Jaffray analyst Gene Munster has weighed in on his thoughts about the rumoured cheaper iPhone:

We believe it is more likely that Apple prices the phone at $149 or $199, more likely closer to $199, off contract given Apple’s history of commanding a premium to the market and believe the core competition at that price level would be $99-199 Android devices.

A $149-$199 unlocked iPhone for emerging markets? That would definitely mean lower margins for Apple, but if the phone is made with polycarbonate and recycled old parts, the cost of making such a smaller device would be much cheaper compared to existing models.

Apple has typically concentrated on selling premium products so the shift to emerging and lower end markets would be a drastic change in strategy for the company. But if Apple decides to do this, there’s probably a good reason for it considering the rising adoption of smartphones by users around the world.



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