Apple may be nearing the end of an era – its next new product may not showcase the company’s best thinking in technology, design and user experience, but instead is likely to focus on efficiency and affordability.
Analysts who follow Apple are predicting a lower-priced iPhone later this year, and Asian suppliers are saying that Apple has started work on such a device. Today China’s Pegatron, which competes with Foxconn as an iPhone manufacturer, said it is increasing its workforce by 40%.
Analysts at J.P. Morgan have been talking to Apple’s Asian suppliers and say that they will be making plastic casings and lower-end components in volume by July, with a product ready to launch a month or two later. They expect a phone with a 4-inch screen, probably powered by Apple’s A5 processor or a similar chipset, rather than the A6 that powers the iPhone 5. J.P. Morgan expects both TDD and FDD versions of the phone, and thinks Apple will price it at around $350 unlocked.
A $350 phone would be much more expensive than some of the entry-level competitors available today, especially in China. So if the analysts at J.P. Morgan are right, Apple is aiming more for the middle of the market than for the low end.
The iPad Mini is in some ways a predecessor to a lower-cost iPhone, because it is a lower margin product for Apple and of course has a smaller form factor than the iPad. But Apple packed the iPad Mini with enough compelling features and marketing hype to position it as an innovation rather than a budget-friendly tablet.
Earlier this year, analysts asked Apple CEO Tim Cook about the possibility of a cheaper iPhone. Cook didn’t say whether or not such a product was in the works, but did state clearly that Apple will never make “a crappy product … We must do something great,” he said. The questions then become whether and how to do something “great” at a lower price, when older models of the iPhone are already available at lower price points. Based on Apple’s history, it’s a fair bet that the company won’t bring a lower priced iPhone to market without at least one innovative new feature. And while the next iPhone may not include Apple’s most advanced technology or design, it could showcase the company’s most creative thinking when it comes to marketing.
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