Goldman Sachs Analyst: Here’s What We Think About a $99 iPhone
If there’s one area where Apple (NASDAQ:AAPL) is seriously lacking, it’s in budget-friendliness. But what if that were to change? And what would a cheaper iPhone be like, exactly? These are the questions that Goldman Sachs (NYSE:GS) analysts have been pondering in recent reports for investors — but don’t get your hopes up just yet for that double-digit $99 price tag.
Analysts speculate that a successful cheaper iPhone would have to stay compatible with iOS, have no smaller than a 3.5-inch display, and cost less than the current lowest-end model. That being said, a $249 price point seems much more likely than the rumored $99. A high-quality display and touchscreen are the two main components that drive up the cost of a phone. A polycarbonate plastic shell might be another cost-effective downgrade from the iPhone 5’s sleek aluminum case.
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Apple’s more limited product offering has always been geared mostly towards high-end consumers, so a lower-end smartphone, rumored for release sometime near the end of 2013, would mark a dramatic shift in corporate strategy. But with so many other companies providing viable options for budget markets, it seems like a mistake for the tech giant not to jump on the bandwagon.
Apple dropped from holding 23% of the worldwide smartphone market in the fourth quarter of 2011 and first quarter of 2012 to just 14.6% in the third quarter of 2012. Meanwhile, Samsung rose to 31.3% from a mere 8.8%.
“A less expensive iPhone [also] risks crimping the company’s profit margins,” The Wall Street Journal reports, “which executives have been loath to sacrifice. Even small changes in margins often sway investors.” Apple representatives have declined to comment.
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