Apple Toying with Low-Cost iPhone Design: Rumor

Apple is experimenting with a “lower-end” iPhone design, according The Wall Street Journal.

Citing unnamed sources “briefed on the matter,” the Journal suggests that the prototype under consideration bears a marked resemblance to the current iPhone, albeit with a “different, less-expensive body.” Whereas the iPhone 5 is encased in aluminum, the lower-cost iPhone would rely on a “shell made of polycarbonate plastic” and parts that “could remain the same or be recycled from older iPhone models.”

Apple’s current strategy for the lower-end smartphone market involves selling older-generation iPhones for cheap; while the iPhone 5 starts from $199 with a carrier contract, the iPhone 4S (its immediate predecessor) sells on Apple’s Website for $99, and the iPhone 4 (two generations removed) costs $0.

That strategy seems an offshoot of Apple’s determination to build and market a single “hero” smartphone per year, rather than mimic its rivals’ roadmaps and flood the market with a large portfolio of devices at wildly varying price points. That’s worked wonders for Apple’s bottom line, as the annual cycle of pent-up demand inevitably translates into huge sales for each new iPhone.

And yet, despite customers packing Apple stores around the world, the iPhone has lost market-share ground over the past few years to Google Android, which runs on a variety of devices from different manufacturers. Android and its associated hardware have also become more sophisticated over the years, to the point where some higher-end devices can challenge the iPhone on polish and features.

As a result, there’s a lot of external pressure on Apple to do something that changes the contours of the smartphone market. The other persistent rumor is that Apple could begin releasing more than one iPhone per year, doubling the pace of its release cycle, in order to compete with those Android manufacturers that seem to push out new devices on a quarter-by-quarter basis. If it goes down that road, the company could release its lower-end and “standard” iPhones a few months apart, satisfying both ends of the market.

But even if Apple decides to go with a cheaper iPhone, such a device could still be some time away. “The iPhone 5 is growing fast and profitably right now, so there is limited incentive for Apple to launch a profit-squeezing iPhone Mini this year,” Strategic Analytics analyst Neil Mawston recently told CNET.

The Journal also cautioned that Apple could abandon the lower-end iPhone project altogether.


Image: Apple