Apple (NASDAQ:AAPL) is pushing assembly partner Hon Hai Precision Co., better known as Foxconn, to start shipping both a new, high-end and a new, low-end iPhone in early September, according to a Wall Street Journal report.
The report, citing unnamed sources, would appear to confirm analysts' suspicions and swirling rumors that Apple will announce two new iPhone models during a September event. Analysts have suspected that Apple will introduce a lower-cost iPhone model with a plastic casing and cheaper components in addition to a new flagship model. Previous reports have said Pegatron was manufacturing the low-cost iPhone for Apple. AllThingsD reported earlier this month that Apple will unveil the next iteration of its iPhone at a media event on Sept. 10.
Apple declined to comment, according to the Journal.
It's unclear at this point how much a cheaper iPhone would cost or how much additional market share it would generate for Apple. Currently, the 16 GB iPhone 5 sells for $649 unlocked, but carriers subsidize that cost down to $199.99 with a two-year contract.
In May, J.P. Morgan analysts Gokul Hariharan and Mark Moskowitz theorized, according to AllThingsD, that a cheaper iPhone priced at around $350 on an unsubsidized basis could help Apple take away some share from rival Samsung Electronics. "Currently Samsung dominates this segment ($200-500 price range) with 35+ percent market share. … 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," they wrote.
In its latest quarter Apple reported a decline in its quarterly net profit, from $8.8 billion a year ago to $6.9 billion in its most recent quarter. But the company's sales of iPhones during the period--31.2 million units, up from the 26 million it sold in the year-ago quarter--beat Wall Street expectations of around 27 million units. Apple CEO Tim Cook partially attributed the company's better-than-expected iPhones sales on shipments of the company's older iPhone 4. Apple for the past few years has been selling older iPhone models at lower prices in an effort to tap into the low-cost smartphone market.
Research firm IDC found that Apple's share of the smartphone market decreased from 16.6 percent a year ago to 13.2 percent in the second quarter of this year, a decline the firm attributed to the fact that Apple hasn't released a new iPhone in close to a year (Apple announced the iPhone 5 on Sept. 12, 2012).
In related news, AllThingsD cited anonymous sources confirming that Apple will add a gold-colored iPhone to its current black-and-white lineup.
- see this WSJ article (sub. req.)
- see this AllThingsD article
- see this CNET article
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