Cheaper iPhone may be released to tap into markets like India, China

The iPhone 5's success is undeniable as five million handsets were sold in the first weekend of its launch. The handset has been selling pretty well in India too and the initial batch had sold out almost immediately. However, India is a tiny market for the Apple iPhone as it is priced considerably higher than its rivals. A report by analyst Gene Munster has now put forward a claim that in order to tackle markets like India and China, where Apple’s user base is not very large, and the brand will launch a cheaper handset that will be ideal for these markets.

A report by Business Insider explains that in the US, if one wants an iPhone 5, they pay $200 as the carrier pays the rest of the cost. The report states, “You pay $200, but Apple collects ~$600. That carrier covers that $400 gap, and hopes to make the money on your data charges.”

Cheaper iPhone may be coming in 2014

However, these subsidized plans are not in place in markets like India and China, where a consumer foots the entire cost of the device.

The report notes that if Apple does not want to lose out on 3 billion potential smartphone buyers, it needs to solve this problem.

Munster believes that a less expensive version of the iPhone, roughly in the region of $200 will be launched by Apple in 2014.

The report goes on to state, “He doesn't elaborate too much on this phone, but we'd posit that it should not just be a last-generation iPhone. We think Apple should make a unique phone that it sells for less.”

The iPhone 5 has already been launched in India but the device is not easily available. If one does manages to get their hands on the device, then it will most likely be the 16GB version as some stores have this variant in stock.

Apple does sell cheaper handsets than the iPhone 5 in India, but they are previous generation models and the price of the iPhone 4S is at par with flagship devices from other brands.

If Apple does intend to stay competitive in the Indian market, the brand will need to launch a budget handset and not an older handset with a lower price tag.

However, Apple does not sell budget products and has never succumbed to the pressure of lowering its prices to match that of the competition.

An ideal example is the iPad mini. This 7.9-inch tablet was expected to debut at a price point of around $200 to $250. But this did not materialise and they launched a product that is significantly costlier than the Nexus 7 and the Amazon Kindle Fire.

Apple has proved in the past that it can be successful with its devices even if it is pricier than the competition. But with the competition offering great products at cheaper costs, how long will Apple be able to keep this up. Hence, a cheaper new iPhone could be a good solution for users in India and China.