3 Reasons Why You Shouldn’t Expect A Cheaper iPhone

There have been rumors for as long as I can remember that suggest Apple will release a “low end” iPhone; something apparently more affordable for the masses. I’ve never written about these rumors because frankly, I’ve never believed them. A “cheap”, entry-level, low-cost iPhone isn’t Apple-esque. You can get a free Samsung phone, if that’s what you’re looking for. Apple has always stood for something more.

A few thoughts.

First, a low-cost iPhone will never happen because Apple already offers iPhones at nearly every price point. You can get the iPhone 4 for FREE, with a two-year contract. The iPhone 4S runs just $99. If you want the latest and greatest, the iPhone 5 starting price is $199, and goes up to $399. Where, exactly, would Apple insert yet another iPhone model in this price structure: $0, $99, $199, $299, $399? Anyone?

Second, Apple is known for their industry-leading profit margins. Even if we pretend there IS room for another iPhone model in the retail pricing structure, they wouldn’t release it because it’d undermine their margins. Remember the iPad mini pricing debate prior to it launching? Most reports suggested it’d start at $199, but said $249 would be the absolute most. And Apple could have sold it for $249 and still made money. But not the kind of margin they (and their stockholders) expect. So, iPad mini starts at $329.

Lastly, Phil Schiller just yesterday told the Shanghai Evening News that cheap smartphones “will never be the future of Apple products.” He was likely referring to the WSJ reported-rumors of a “low-cost” iPhone.

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[Source: Shanghai Evening News]

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