What if Apple doesn’t need to launch a cheaper iPhone, because it already has it? According to NPD Group’s Stephen Baker, Apple already has two lower-end iPhone models: the iPhone 4 and 4S.
A separate report sent to Bloomberg by Gene Munster of Piper Jaffray reinforces this earlier claim: although roughly 15% of iPhone users do actually trade their old iPhone in, there is a strong demand for secondhand iPhones. You can recoup up to 60% of its price if you offer the device for sale on internet auction sites like eBay.
Of course the demand is from emerging markets. There is a “truly insatiable demand in some of these markets.” As the BusinessWeek report indicates, Gazelle is close to shipping its millionth iPhone from the US to its resellers in Hong Kong.
But carriers have their promotions as well. For instance, you can obtain an iPhone 4 for $0 at Telus if you are willing to sign a two-year contract.
Analysts say the booming secondary market creates a win-win situation for Apple. It helps to maintain and slowly grow the company’s global market share. What is interesting is that since January, rumours have circulated that a cheaper iPhone is on the way featuring a less expensive polycarbonate shell. According to sources, the device was originally planned for January release and to sell for as little as $99 without a contract.
But it didn’t. The low-end of the market, though, seems to be covered. What Apple doesn’t have yet is a mid-tier device. Analysts claim that Apple will target the middle end of the market by launching the budget iPhone.