Apple rumors about cheap iPhone resurface

January 9, 2013

Rumors that Apple is planning to launch a cheaper version of the iPhone have resurfaced, thanks to twin reports from the Wall Street Journal and Bloomberg.

The rumors are very similar to reports both outlets pushed out two years ago, saying that the company was on the verge of releasing a cheaper version of it’s iconic phone to go after the lower-end of the smartphone market.

According to the Wall Street Journal, Apple may offer the new phone as early as the end of this year. It also may decide not to go through with the product, the report said.

The WSJ report also said Apple might be able to sell the iPhone at a lower price point by using cheaper materials such as polycarbonate plastic rather than aluminum for the phone’s body. That would be a bit of a departure for Apple, which has always prided itself on using high-quality materials that make their products, and in particular their iPhones , feel a cut above budget options from Android handset makers. It could be difficult for the company to reconcile a “budget phone” with its carefully constructed image as a premium brand.

Whatever the construction plans, a cheaper iPhone would make some sense for Apple. The Cupertino, Calif. firm has taken some steps to addresses the price-conscious consumer, opting to discount older models rather than introduce multiple current models of its flagship phone. Apple also offers the iPhone in no-contract, pay-as-you-go plans on select carriers.

A new, cheaper iPhone — if it exists — would likely be marketed to emerging economies, where Apple has potential for growth but is sometimes priced out of the mainstream market. Smartphones from companies like Samsung, Huawei and ZTE, meanwhile, have large customer bases in these price-sensitive countries, and are poised to benefit the most from the planet’s ever-increasing mobile adoption.

Samsung, of course, continues to be Apple’s greatest competitor. The company announced Tuesday that it is projecting record profits for this quarter of around $8.3 billion (8.8 trillion won) as it continues to hold court at the International Consumer Electronics Show.

Apple, which does not attend the show, will report its earnings on Jan. 23. The report will reveal how the firm fared during the holiday season as it pushed a range of new products including the iPhone 5, iPad mini, redesigned iPod Touch and iMac computers. The company did report this week that it’s reached a new App Store milestone: customers have now picked up 40 billion apps for their devices — nearly 20 billion in 2012 alone.

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Hayley Tsukayama covers consumer technology for The Washington Post.
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