Budget iPhone To Help Apple Grab 11 Percent Of The Low-End Smartphone Market

Budget iPhone 400x250 Budget iPhone To Help Apple Grab 11 Percent Of The Low End Smartphone Market

Analysts have started to predict the rise of more affordable iPhone models which, according to them, might take over more than 10 percent of the low-end smart phone market in only one year from its official launch. The expected price for the device to come is $300 without any contracts or special offers.

According to Gene Munster from Piper Jaffray, in a review this week, the expected percentage for Apple to detain until 2014 is 11 percent of the entire low-end smart phone market. Also, according to him, the iPhone is expected to come  by the end of September 2013 and its price is estimated at $300.

The high-end smart phone market is controlled by Apple with 42 percent of the whole market, with the existing iPhone lineup – which means 3 devices (iPhone 4, iPhone 4S and iPhone 5) . Also, the analysts expect the launching of the less expensive iPhone model this year (or more optimistic, as Gene Munster suggests, by September), which is targeted to the market segment which is not yet detained by Apple (we refer to medium to low-income, but still with the need for internet and a smart device)

According to the same Munster, Apple could get 30 percent gross margins with the so-called $300 iPhone, out of the total of 55 percent gross margins Apple has from the current models. The current high-end devices have an average selling price of $620, which in the end is determined by the carrier contract subsidy. So, in the worst scenario, 30 percent of the existing iPhone sales will be absorbed by the low-end iPhone. If this happens, the loss for Apple would be lowered from 38,6 percent gross margins in December 2012 to 36.6 percent in 2014.

Piper Jaffray, the full service asset management firm communicated on Tuesday that the Apple Inc. price target is lowered from 767 to $688.

Still, the expectations for the immediate future in Apple’s budgets are optimistic. Munster expects that the June revenue of Apple will be somewhere between $34 billion and $36 billion, still below Wall Street’s predictions. The investors have another predicted sum for the June quarter and this is $39.6 billion.

The quarterly dividend for the first months of 2013 is expected to be increased. Still, until next Tuesday, on the 23rd of April, when the company is scheduled to divulge its earnings, these are only rumors.

Until 23rd of April, when we  will surely inform you on the actual earnings of Apple,  we invite you to follow us on Twitter, connect with us on Facebook or Google +. We promise you fresh news on other iOS interesting topics! See you there!

  • By Alexandra Zamfirescu
  • April 17th, 2013
  • News