Apple’s recent launch of the iPhone 4S was met with mixed reviews, in no small part because Apple fans were hoping instead for the announcement of an iPhone 5. But before the iPhone 5 is rolled out, it is much more likely, sources say, that Apple will release a cheaper version of its iPhone 4 model.
Do you think Apple will introduce a “cheaper” version of iPhone 4 before the iPhone 5? Tell us in the comments.
Reports say that the model will come with an 8 GB memory and a flash drive that is manufactured by a South Korean company rather than the iPhone’s current manufacturer, Samsung.
Penetrate New Markets
With the release of a cheaper model, Apple would undoubtedly be angling for business from lower-income demographics that cannot current afford its product. But it will have a hard time gaining much traction in this market, even with the release of a cheaper product, because it will have a hard time offering the iPhone through prepaid phone plans.
Fair Price For Prepaid Users
Carriers that provide such plans not only offer greater flexibility, but they are also major players amongst low-income cell phone users. Consumers can pay as they go, with no contract or regular monthly fee. The downside to prepaid plans is that, with no contract, the phone itself will no longer be provided at a discount. Which gets us back to Apple’s problem.
Cheaper Version To Lack Features?
The iPhone 4 currently sells for around $650. Without getting it through a subsidized contract, consumers going the prepaid route need to shell out the full price if they want the phone. Few prepaid phones sell for more than $250, and even if Apple can exceed that price by relying on its strong brand image, the company will have a hard time getting the iPhone down to the $300 range. It may need to reduce its internal memory, offer a lower quality screen, and use a less expensive processor. Of course, if Apple cuts too many corners it risks diluting its product and hurting the image of its overall brand.
See You Soon… Maybe
If Apple could succeed, however, in trimming down the cost, the ramifications could ripple across the industry. Prepaid suppliers like MetroPCS and Leap Wireless would probably seek to carry the product, but they might have to reconfigure their networks – and raise their costs – to support the added data demands. And suppliers of low-cost smartphones may stand to lose significant market share.
Apple, then, as a company that has already revolutionized the high-end phone market and the industry as a whole, would likely have an impact of similar magnitude if it could find a way to lower costs and introduce a cheaper iPhone 4.
[Read also: How to Choose the Best Business Mobile]
Do you think Apple will release a prepaid iPhone? Let us know in the comments.