NEWS ANALYSIS: The latest rumors claim Apple plans to introduce a lower priced iPhone in emerging markets. Such a move might just work out for Apple.
When the rumor cropped up earlier this month that Apple was developing an “iPhone Mini” model that it would release some time in 2013, many folks shrugged.
At the time it seemed that the chances of Apple offering a stripped-down iPhone for the sake of saving customers some cash was nonsense. Apple was a luxury product maker, some said, and a cheap iPhone just doesn’t fit within that strategy.
Since then, however, report after report has surfaced claiming Apple is, in fact, working on an iPhone Mini. And that device will not only be available later this year, but it will hit the market at a price that's sure to appeal to smartphone buyers in emerging markets around the world.
Better yet for Apple, the device could very well deliver the kind of profit margins the company has come to expect from other products. Simply put, a low-priced iPhone could be just what Apple needs to attract customers in emerging markets and bolster its bottom line.
Doubt still remains over whether a cut-rate iPhone can actually succeed
. But further consideration indicates that there’s a good chance that the iPhone will be another big success for Apple.
Read the reasons why here.
1. The economy matters
The economy isn’t turning around nearly as quickly as many had hoped. There are people across the world who can’t afford top-model smartphones such as the iPhone, which is very much looked upon as a luxury product outside of North America and Europe. A lower-cost iPhone puts it within reach of more buyers and makes it look more like a smartphone for the masses.
2. Emerging markets are booming
According to most reports surrounding the iPhone Mini
, emerging markets will be the focal point of Apple’s strategy. That’s arguably one of the chief reasons the device will succeed. Emerging markets around the world are booming. And in several countries across Asia and South America, the number of people ready to buy premium products is soaring. Apple’s iPhone Mini could easily take advantage of that.
3. iPhones represent what’s achievable
Apple has a trump card that no other vendor in the industry has. iPhones are what could be called “aspirational” products. In countries around the world where luxuries are hard to come by, buying an iPhone means a person has achieved something special. By offering a lower-priced model, Apple is bringing the iPhone within reach of more folks who will buy the smartphone to prove to friends and family that they have arrived. It’s a piece of psychological and sociological marketing that can’t be underestimated.
4. Apple plays with margins
Apple’s low-priced iPhone will succeed from a financial perspective. Granted, the device will be cheaper, but Apple has an amazing ability to squeeze out production costs and play with margins to get every last dime out of a sale. The low-priced iPhone will be no different.