Is a Cheaper iPhone on Its Way?

Jefferies analyst Peter Misek had suggested last month that Apple (NASDAQ:AAPL) was contemplating creating a low-cost iPhone with scaled-down features for cost-conscious markets. According to a report in DigiTimes on Tuesday, the company may in fact launch such a device in the second half of this year.

According to DigiTimes, which does have a questionable track record, supply chain sources indicated that Apple was working on manufacturing the cheaper iPhone with Qualcomm’s (NASDAQ:QCOM) latest Snapdragon chipsets. “Some sources claimed they had seen the sample of the low-cost iPhone, which will come with a larger display, meeting the prevailing trend for the adoption of five-inch displays for high-end models,” the report said. “They added that the low-priced iPhone will also have a brand new exterior design.”

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The rumors of Apple launching a cheaper version of its smartphone were originally born partly because of the popularity of low-cost Google (NASDAQ:GOOG) Android devices in markets such as China. With the company releasing the iPad mini last year, it was established that Apple was not shy to work with lowered margins if it led to an increase in unit sales. The smaller Apple tablet is reported to have seen “insatiable demand” in both mainland China and Hong Kong.

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Last week, Strategy Analytics analyst Neil Mawston said that he believed Apple would be forced to launch an “iPhone mini” in the next three years to address prepaid users worldwide who “cannot afford the iPhone.”

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