Taiwanese electronics manufacturer Pegatron – which produces some Apple products (iPad mini) alongside primary gadget builder Foxconn – has been commissioned to build a rumored less-pricey iPhone. According to the Taiwan-based newspaper Commercial Times, Pegatron will begin the pilot production for a low-cost version of iPhone in May, before Apple’s new products hit the market in the third quarter. Pegatron is forecast to ship about 40 million devices of the new iPhone model, whose price could be reduced to as low as US$350 (unlocked, contract-free) by adopting a plastic casing, also in conjunction with a choice of different colors. The iPad mini already have had a significant effect on sales of the full-size iPad. iPad mini is on pace to outsell its bigger brother. Market watchers believe the same ‘eroded effect’ might also occur in the iPhone series if a new cheaper iPhone is going to release this summer …
Pegatron has apparently become Apple’s joint design manufacturer, it’s easy for the Taiwanese contractor to grab a hand on the productin of less-pricey iPhone. Pegatron is already resposible for making 40 percent of the iPad Minis, thanks to Apple’s move toward using more assemblers. Apple is now facing stiffening competition from its rivals at Samsung, Google, and even Microsoft. So the Cupertino will need to pull out all the stops for its iPhone 5 successor, as well as for the cheaper iPhone, as it seeks to keep customer interest in an increasingly crowded marketplace. To stay competitive, releasing a low-priced iPhone to attack the emerging markets might be the key. Even though Apple wants to make greater inroads in China, the price of the current iPhone 5 is simply too steep in the country. The iPhone 5 hardware alone starts at US$849 here, the iPhone 4 at US$500, in a country where the average annual salary is around US$3,000 per person.
A budget iPhone model would help sales in populous but underdeveloped countries to grow, but it could also backfire by diluting Apple’s premium brand – which can consider one of its most valuable assets in Chinese market. Apple certainly can afford to build an entry-level to midrange smartphone on top of its current iPhone, to appeal to consumers who can’t quite afford Apple’s most popular product, including many in China. It will be interesting to see how Apple going to position the less-pricey iPhone to their next flagship (iPhone 5s ? iPhone 6 ? ).
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