If you think the unlocked iPhone is too pricey, you're in luck - technology giant Apple is reportedly mulling a release of a mid-range iPhone sometime in September that won't tie you down to any contract.
Deutsche Bank analyst Chris Whitmore believes Apple will release an iPhone priced between $300-500 without requiring the customer to be tied down to a 2-year contract.
It's time for a mid-range iPhone, Whitmore said. The analyst said the mid-range iPhone may be called iPhone 4S and could be set for release in September together with the next generation iPhone 5, which will boast of major hardware and software upgrades, including A5 processor, 8-megapixel camera, SIM-less design, curved glass display and iOS 5. iPhone 4S will retain the same design as iPhone 4 with minor update.
With iPhone 4S, Apple will address the needs of nearly 1 billion mobile users, who are on prepaid plan. Except in the USA & Canada (8 percent) and the Middle East (41 percent), the number of prepaid users are more in Europe (51 percent), Latin America (66 percent), Asia Pacific (85 percent) and Africa (96 percent).
According to Whitmore, Apple shipped (about 87 million) units over the past 2 years which suggests it has reached only 6 percent penetration of its current addressable subscribers.
Moreover, with Nokia and RIMM struggling the time is right for Apple to aggressively penetrate the mid range smart-phone market to dramatically expand its...market share, Whitmore said.
Looking forward, we believe Apple has room to run both in terms of greater market penetration as well as incremental carrier additions going forward, the analyst said.
Whitmore predicts that Apple could sell iPhone 4S at $349 - a price which will help Apple increase its corporate gross margin without negatively impacting profitability.
Whitmore is not alone in thinking that Apple will launch iPhone 5 as well as iPhone 4S in September.
Morgan Stanley's Katy Huberty in a note to clients said on Sunday that Apple's iPhone is all set to begin production in mid- to late August and ramp aggressively and would start selling iPhone 5 by the end of the third quarter i..e. by end of September.
The analyst said Apple will witness a 'large bump in iPhone units sold in 2012 especially on the back of new products and potentially lower price points.
Huberty also believes that in 2012, a 4G LTE iPhone (iPhone 6?) and a lower-priced 3G model will make their debut.
Last week, a Bloomberg report also said a cheaper iPhone would also help Apple narrow the price gap that has made phones running Android more popular than iPhones.
Apple has considered selling the new iPhone for about $200, without obligating users to sign a two-year service contract, said the person who has seen it, the report states. It also noted it's possible the project could be delayed or scrapped entirely, as Apple often works on products that do not later get released.
If the predictions, especially about a mid-range iPhone, turn out to be true, it will definitely help Apple steal a march over its rivals as a cheaper iPhone would significantly lower the entry barrier for prepaid smartphone customers.
In the US, iPhone 4 32GB model retails for $299 (with 2-year contract) and 16GB model retails for $199. Unlocked iPhone 4 32GB model retails for $749, 16GB for $649. And 8GB iPhone 3GS retails for $49 (with 2-year contract).
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