Speculation on Cheap iPhone

Posted by Sam Churchill on

Sameer Singh in Tech Thoughts has calculated the gross margins of an inexpensive iPhone, and based on his cost estimates, and taking into account a further 10% drop in costs over the next 6+ months, he thinks a $299-$350 price is likely.

Apple currently makes a gross margin of 68% on the iPhone 5, which means that it would expect a gross margin hovering around 60% from the iPhone Mini. This would put the price of the iPhone Mini in the $299-$349 range, i.e. in the same ballpark as the iPad Mini. Since the product is meant to be focused at the low end of the market, particularly emerging markets, it would lack LTE.

Apple’s goal would be to make a bigger impact in emerging markets such as China & India, where subsidized smartphone sales aren’t necessarily the norm and the high iPhone prices have capped market share gains.

Posted by Sam Churchill on Monday, January 14th, 2013 at 9:58 am .

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