Apple may build less expensive iPhone: report
In this Thursday, June 24, 2012 file photo, Jeremiah Ulibarri checks out his new iPhone 4 outside of an Apple store in Chicago. (AP / Kiichiro Sato, File)
The Associated Press
Published Wednesday, January 9, 2013 10:47PM EST
Apple is trying to decide whether it makes sense to offer a cheaper iPhone as it tries to boost sales in less-affluent countries and reclaim some of the market share lost to cheaper phones running Google's Android software, according to a published report.
Wednesday's report in The Wall Street Journal speculated that Apple could lower the iPhone's price by equipping the device with an exterior that costs less than the aluminum housing on current models.
A cheaper iPhone could come out as early as this year, or the idea could be tabled for future consideration, as has previously happened. Citing unnamed people familiar with the matter, the Journal said Apple began assessing the pros and cons of making a cheaper iPhone in 2009 and has periodically revisited the notion. Apple Inc. declined to comment to The Associated Press.
Apple so far has stuck with an approach that has stamped the iPhone as the gold standard, a device that warrants a higher price than other smartphones. Under this tack favored by Apple's late CEO, Steve Jobs, the company sells a premium-priced iPhone that has been updated annually with new features since its 2007 debut.
In an attempt to appeal to more budget-conscious consumers, Apple has been selling older models of the iPhone at discounts before phasing them out.
The latest iPhones start at $199 in the U.S., but those prices are subsidized by wireless carriers, which figure they can make up the costs through monthly service fees over the life of a two-year contract.
The unsubsidized prices start at $649. That is proving to be too much for many people looking to stay connected on the go, prompting them to snap up more affordable smartphones, including Android devices made by Samsung Electronics Co. and others. Google Inc. doesn't charge for the Android mobile operating system, making it easier for device makers to undercut the iPhone. Apple doesn't allow rivals to use the iPhone's iOS operating system at all.
Android devices accounted for 75 per cent of smartphone shipments during the three months ending in September, up from 58 per cent at the same time in 2011, according to the research firm IDC. The iPhone's share stood at 15 per cent in September, up from 14 per cent in the previous year.
Google says more than 500 million Android devices have been activated since the software's release four years ago. By comparison, Apple had sold about 271 million iPhones through last September.
Apple could fall further behind as it focuses more on markets outside the U.S. and Europe. That's because many households in some of the most promising markets, including China, can't afford iPhones at their current prices. Apple CEO Tim Cook, who took over the helm shortly before Jobs died in October 2011, is currently visiting China.