The first line of inexpensive iPhones is set for an unofficial release this summer.
Following a meeting with Apple CFO Peter Oppenheimer, noted Morgan Stanely analyst Katy Huberty is more confident than ever that Apple will introduce the much-anticipated low-cost iPhone by July. She also mentioned that the tech giant will expand its carrier base, distribution and price points to help increase the company’s cash return for its shareholders.
In a note to the media, she listed three reasons why it makes sense to role out a new, low-priced smartphone.
“iPad Mini is expanding Apple’s customer base with 50 [percent] of purchases in China/Brazil representing new customers to the ecosystem.”
“Chinese consumers show a desire to purchase the latest version of iPhone (instead of discounted older generations.”
iPhone 4 demand surprised to the upside in the December quarter.”
The biggest point to drill home is that the introduction to the new, inexpensive iPad Mini has opened the door to a low-cost iPhone. With it’s continued success (especially in emerging markets), there’s no reason why the iPhone couldn’t follow suit.
Still, there is some hesitancy on whether the iPhone Mini would cannibalize other iPhone sales, but Huberty noted that it would still boost revenue and profits. From there, it was clear that a low-cost iPhone would make sense. And it was just a matter of time before Apple started churning out new ideas for a new phone.
Huberty also added that Apple will sign with new carrier partnerships including T-Mobile, NTT Docomo and China Mobile (the largest carrier in China). Consumers can expect a new deal between carriers by at least 2014.
Currently, many consumers are opting for the older and much more discounted iPhone generations. And with Apple’s new smartphone model starting to slow in the U.S. as well as other mature markets, it’s important that the Cupertino-based company to nab a piece of the pie in the emerging markets. A lower priced phone would make all the difference in claiming such a demographic, where few can afford such expensive gadgets.
The new iPhone won’t be the only release we will see this summer. Many reports have indicated that Apple is in line to announce the latest iPad edition sometime this summer as well.