Apple predicted to introduce lower cost iPhone models in June

Posted:
in General Discussion edited January 2014
Apple's next update to the blockbuster iPhone handset is expected by one prominent analyst to have a lower total cost of ownership, and to also include new gesture-based functionality.



Katy Huberty with Morgan Stanley maintains that the biggest barrier to greater iPhone adoption is the cost of the hardware, followed by the service plan. The investment in the device has been its biggest issue in both developed markets like the U.S. and emerging ones like China.



But Huberty expects Apple to address that in June, by introducing a new model that will be economically friendly to even more consumers.



"We expect Apple to launch new iPhones in June that offer both a lower total cost of ownership and new functionality, potentially including gesture-based technology," she wrote in a new note to investors Friday.



In 2009, when Apple introduced the new iPhone 3GS, the company also dropped the price of the previous year's iPhone 3G to $99. However, despite the lower price point, the high end iPhone 3GS was still the most popular option for consumers.







In addition to lower cost of ownership for the iPhone, Huberty remains bullish on AAPL stock because of the forthcoming iPad launch in March. Here she is particularly optimistic, projecting shipments of 6 million devices in the 2010 calendar year, versus Wall Street's average projections of 3 million to 4 million.



"We expect Apple to ship its first iPad and announce additional content deals in late March to better than expected demand," Huberty wrote. "We see the iPad targeting the sub-$800 consumer notebook market which equates to 30M annual units just in the US (120M globally."



Morgan Stanley has maintained its "overweight" rating for AAPL stock, with a price target of $250.



In the past, Huberty was notoriously negative on AAPL stock, suggesting the iPhone was too expensive even at a $199 price point. In late 2008, she predicted that iPhone sales would suffer because Apple had priced the product too high.



But last year, Huberty turned positive on Apple, stating that the company had become the "clear leader in the battle over the mobile Internet."
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Comments

  • Reply 1 of 82
    mazda 3smazda 3s Posts: 1,529member
    Cost is the greatest barrier? Cheapskates can get refurb'd models for sub-$100. Hell, Best Buy had 16GB 3GS phones for $50 this week.



    http://slickdeals.net/forums/showthread.php?t=1882030
  • Reply 2 of 82
    I do agree that the iPad will perform exceptionally well for Apple and expand the 'halo' effect to other Apple product lines
  • Reply 3 of 82
    Quote:
    Originally Posted by Mazda 3s View Post


    Cost is the greatest barrier? Cheapskates can get refurb'd models for sub-$100. Hell, Best Buy had 16GB 3GS phones for $50 this week.



    http://slickdeals.net/forums/showthread.php?t=1882030



    not every person lives in the us



    an unsubsidized iphone is very expensive, specially in developing countries
  • Reply 4 of 82
    These people (analysts) are a joke. The information they report on is equal to gossip magazines for me. Rarely if ever do they have anything worthy to say. Next...



    I have not heard, nor seen, one bit of consumer data that suggests people are refusing to buy the iphone bc it is too expensive. I mean the 3G is $99 - give me a break! If people are refusing bc that is too high then maybe they should not have a phone.



    Most people I know who won't purchase an iphone don't bc they don't want AT&T or they are waiting for the next release. For the money, it is the best bang for the buck and clearly the best phone available period.



    I hope they don't change the pricing at all - but instead give us more for the money.
  • Reply 5 of 82
    Quote:
    Originally Posted by doyourownthing View Post


    not every person lives in the us



    an unsubsidized iphone is very expensive, specially in developing countries



    you are correct. But you have to keep in mind, this is an analyst who is reporting on conditions/opinions related to the iphone, Apple, and stock in the US. She is a market analyst (and a lousy one at that). Her comments were not aimed at the pricing of the iphone in a global market. That would be a different type of report from a more qualified individual.
  • Reply 6 of 82
    crowleycrowley Posts: 5,524member
    Do analysts really get paid for saying that products sell better when they are cheaper?



    I guess more people listen to cheap analysts too?
  • Reply 7 of 82
    eaieai Posts: 417member
    There's a massive market of young people who can't afford the cost of an iPhone, and more importantly it's contract. These are traditionally a big market for the iPod, so it'd make sense to try to get a phone that could be approaching the iPod Touch's price - hard, but not impossible.
  • Reply 8 of 82
    "Best Buy had 16GB 3GS phones for $50 this week."



    wow, that's a great deal.



    I'm going to upgrade to the 3Gs soon.
  • Reply 9 of 82
    s4mb4s4mb4 Posts: 267member
    i would buy an iPhone for my wife and 2 sons if the service plan was not so high. I already pay $142 a month for the family plan i have (no data). If i wanted to add 3 iphones to the mix, it would be well over $200 / month. I do not have any issue with the $199 handset cost. just the monthly service. why can't i buy an iphone w/o the data plan? that is what i really want. i can buy a handset from AT&T that has data capibilties w/o a data plan. just not the iPhone....
  • Reply 10 of 82
    neilmneilm Posts: 533member
    Translation from analyst-speak to regular language:

    "What a gig! I get paid to make stuff up based on nothing more than what I imagine Apple ought to do to make up for their embarrassing fail with the iPhone. Oh wait..."
  • Reply 11 of 82
    Quote:
    Originally Posted by ElmCityWeb View Post


    "Best Buy had 16GB 3GS phones for $50 this week."



    wow, that's a great deal.



    I'm going to upgrade to the 3Gs soon.



    I hope it's the iPhone nano. Last year there was a mock up. Looked like the older square nano with glass that doubled as the dialed, invisible when shut so you could browse the web, so it's also touch glass, making touching in two places. Inlobed it but that design sounds pricey what apple should really do is work with att to lower cost.
  • Reply 12 of 82
    neilmneilm Posts: 533member
    Quote:
    Originally Posted by s4mb4 View Post


    I do not have any issue with the $199 handset cost. just the monthly service. why can't i buy an iphone w/o the data plan? that is what i really want.



    Because $199 is not the handset cost. It's not even the handset price. Instead it's the handset down payment, with the balance coming out of your monthly service plan. That tends to preclude a low cost service plan.
  • Reply 13 of 82
    I though the biggest barrier to greater iPhone adoption was it's inability to play Flash video or games.
  • Reply 14 of 82
    I find it quite funny when I see US customers complaining about the iPhone's price. Do you have any idea how much you have to pay for a 32Gb 3GS over here (Portugal)? ?700! That's around $950!!! You may eventually get a deal (with a new contract) for about ?400, but that's still $550, almost twice as much as in the US.



    So don't tell us, in Europe at least, about the iPhone being expensive...
  • Reply 15 of 82
    Lowering handset price further makes no sense. As mentioned, specials already hit $50. Taking that down to $0 is going to have a limited effect.



    What would help, is offering the iPad's 250MB/mo data plan on the iPhone. My guess is AT&T really doesn't want to do that though, as most iPhone owners are going to be under 250MB/mo, so they'd be leaving $15/mo on the table.



    But maybe they can be convinced they'd make up for it with iPad plans or a general tethering option (finally).



    Offering the iPhone without a data plan would be a huge sales boost for Apple. But I can't see AT&T going for it. And it would detract enough from the 'magical' iPhone experience that I can't see Apple pushing for it.
  • Reply 16 of 82
    Quote:
    Originally Posted by NeilM View Post


    Because $199 is not the handset cost. It's not even the handset price. Instead it's the handset down payment, with the balance coming out of your monthly service plan. That tends to preclude a low cost service plan.



    This analyst is clueless. The phone price is not the barrier. It's definitely the cost of the monthly plan.



    At&t doesn't even offer discounts for data in a family plan.

    Why should we pay $30 for unlimited texting and $30 each for unlimited data???



    The biggest compliant I've heard from people is about the required monthly data plan.



    If Apple offered an unlocked phone for $399 that would work on both At&t and T-mobile, people would jump on it.
  • Reply 17 of 82
    igeniusigenius Posts: 1,240member
    Quote:
    Originally Posted by OnePotato View Post


    I though the biggest barrier to greater iPhone adoption was it's inability to play Flash video or games.



    Naw. People don't expect the full internet on their phone.



    The 'Pad, OTOH...
  • Reply 18 of 82
    Quote:
    Originally Posted by OnePotato View Post


    I though the biggest barrier to greater iPhone adoption was it's inability to play Flash video or games.



    Shhh. You never want to spoil a good conspiracy theory with actual data.
  • Reply 19 of 82
    The analyst may or may not be off base, but this is a report of a poll, not just an opinion.



    Consumers are notoriously unable to express their true motivations in a poll, but when you see one or two choices coming up in overwhelming numbers it lends credence to those facts.



    I know it's silly to choose a non-iPhone because the handset is $50 or $100 less when you're facing several thousand dollars of contract fees, but based on my experience running a cell phone store a few years ago, that's exactly what many many people do.
  • Reply 20 of 82
    Quote:
    Originally Posted by DyingSun View Post


    I find it quite funny when I see US customers complaining about the iPhone's price. Do you have any idea how much you have to pay for a 32Gb 3GS over here (Portugal)? ?700! That's around $950!!! You may eventually get a deal (with a new contract) for about ?400, but that's still $550, almost twice as much as in the US.



    So don't tell us, in Europe at least, about the iPhone being expensive...



    That's precisely what I was going to mention. In Europe we tend to get the short end of the stick when it comes to pricing. In some of the more expensive stores, an unlocked iPhone 3Gs 32GB costs around ?1000 (that's around $1355).
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