Will rumored iPhone 'C' boost Apple in China?

Reports say the company may unveil high- and low-end versions of its smartphone as early as next month.

By Bruce Kennedy Aug 21, 2013 4:55PM

Credit: © 2012 Apple Inc
Caption: Apple iPhone 5Even if you're not a techie who counts the days and swaps gossip until the release of a new Apple (AAPL) iPhone, next month's expected unveiling could be quite newsworthy.


Analysts say the company may be preparing to make an economic and demographic split, developing a low-cost, plastic-backed iPhone along with a traditional, high-end version. The low-end model could help Apple boost sales in China and emerging markets as well as recover some of the share lost to Samsung (SSNLF) and other rivals.


While Apple isn't officially commenting on the new phone rumors, journalists and tech bloggers are digging up plenty of new information.


The Wall Street Journal reports the Hon Hai Precision Industry Co., also known as Foxconn -- which manufactures and assembles electronics for Apple, Cisco Systems (CSCO), Dell (DELL) and others -- is expected to start shipping the low-end and high-end iPhones by early next month. The Journal also notes this would the first time Apple would be announcing different iPhone models at the same time, suggesting a shift in its marketing strategy.


While Apple has remained competitive, its future following the death of founder and chief innovator Steve Jobs has been questioned. Its stock price, according to The Journal, dropped more than 40% from all-time highs last September. Its iPhone numbers overall remain strong, but have taken a hit in China.


"China is currently Apple's second-largest market," notes AllThingsD, "and CEO Tim Cook says he believes it will someday become the first. But recently the company's momentum in the region has waned."


In fact, according to the website, Apple's third quarter revenue from greater China -- which includes the mainland, Taiwan and Hong Kong -- dropped 14% from a year earlier.


Meanwhile, Morgan Stanley analyst Katy Huberty tells AllThingsD that the low-end iPhone -- which some are calling the "iPhone C" -- could really put Apple back in the smartphone game in China.


Huberty, analyzing data from a smartphone user survey in China, found that Chinese customers consider $486 to be an 'acceptable' price for an iPhone C, AllThingsD reports. She also predicted affordable iPhone Cs would cut into sales from Apple rivals such as Samsung and Nokia (NOK).


So does the arrival of the low-cost iPhone C also mean less expensive smartphones in the U.S. and other western countries? We'll probably know more by Sept. 10th -- the date Apple has reportedly scheduled its next product launch event.


More on moneyNOW

1Comment
Aug 22, 2013 9:50AM
avatar
How about doing something innovative for the regular iPhone instead of the normal upgraded processor, longer battery life, and more memory. I don't see the need for a budget iPhone, the iPhone 5 will fill that spot after the 5S comes out.
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