Citing Jefferies analyst Peter Misek, Apple Insider reported that Apple would begin production of the preliminary builds of the “iPhone 5S” in March, with a possible release date for the device being set for sometime in June or July.
According to some earlier reports, Apple may surprise the tech world this time around by releasing two iPhone models, one being the company’s flagship version while the other one being the highly-rumored cheaper version of the smartphone. Misek also agreed to the same theory saying that “two future iPhone prototypes are currently testing. At least one of these is said to be a so-called ‘iPhone 5S,’ while the other could be Apple's rumored low-cost iPhone.”
In a recent note to investors, Misek said that the growing anticipation for the “iPhone 5S” could cause a slight slowdown of the demand for the existing iPhone 5. He said that as many as 44 million iPhone units would be sold in the March quarter, “a number he noted is ‘still well above’ recent concerns that shipments might be in the mid-30-million range.”
Misek opined that the reduced demand for the iPhone 5 and an apparent decline in the handset’s component orders from Apple were not interlinked. Instead, he believed, the order cuts dealt with some other factors, which, as Apple Insider pointed out, were:
- An assembly bottleneck that caused component inventories to rise in the holiday quarter.
- Planning for preliminary production of the next iPhone in March.
- Demand may be either in line or "slightly below optimistic expectations.”
Misek said that while a Jun/July launch for the “iPhone 5S” would break the smartphone’s traditional yearly release cycle, the highly anticipated low-cost iPhone, which has already been “green-lit,” would be focused on the emerging markets like China.
"Similar to the iPad mini, we expect a concentrated low-cost iPhone rather than a 'cheap' one," Misek said. "Likely specs: polycarbonate case with 4" non-Retina display and no LTE."
The analyst said that a low-cost iPhone would increase Apple’s share in the smartphone market, but would also decrease its gross margin. However, according to him, the cheaper iPhone won’t impact the Cupertino tech giant’s earnings per share.
Meanwhile, former Apple CEO John Sculley told Bloomberg Television Tuesday that the company should rethink its strategies to adapt to emerging market growth. Sculley, who seemed in favor of a more affordable iPhone, said that “Apple needs to adapt to a very different world.”
“As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you’ve got to dramatically rethink the supply chain and how you can make these products and do it profitably,” said Sculley.
On the apparent weak demand for the iPhone 5, Sculley said that although there’s “nothing wrong” with the device, the difference between Samsung products and the iPhone 5 had shrunk significantly.
“Samsung is an extraordinarily good competitor,” Sculley added. “The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see.”