) has reportedly said that it will not develop a cheap iPhone.
Instead, the company is expected to build a low-cost iPhone and
promote it as a more affordable alternative to the existing
models. This would theoretically allow Apple to avoid the
negative connotations that come with developing a "cheap"
, Apple may choose to release its low-cost iPhone in limited
quantities this summer.
Companies within the iPhone's Taiwanese supply chain are
speculating that this model will target emerging markets with an
initial shipment of jut 2.5 million to three million units.
With few units available, consumers may scramble to get their
hands on the device, which is expected to come with a
"cost-effective" plastic chassis, a four-inch display and an A6
If this were the latest and greatest iPhone, empty-handed
consumers would simply wait for the next shipment or order the
This is not the next iPhone, however -- it appears to be a
cheaper, revised version of the current model. If consumers can't
buy it but are offered the chance to get an even faster iPhone
for $X more, they might be tempted to cough up the cash.
That could be Apple's ultimate goal. While Samsung is
unashamed about its tactic to flood the market with as many
units/models as possible, Apple prefers to implement a more
It worked quite well for the second-generation iPad. When it
arrived at retail, Apple initially shipped and sold a very
limited number of units.
Before shipment times
, rumors suggested that the company may have purposely dispersed
new units after they arrived at each Apple Store. Instead of
selling them all at once on a first-come, first-serve basis, the
company was thought to have sold only a few units per day in
order to keep customers coming back. This also created the
illusion that Apple received new shipments every morning.
Whether or not this was true, only Apple and its employees
know for sure.
In any case, Apple has not experienced any massive shortages
-- intentional or not -- since the iPad 2 was released two years
While the supply chain had warned that the iPhone 5 could be
hard to find
, most consumers got what they wanted when the device was first
Thus, Apple may have no intention of shipping a limited number
of low-cost iPhones this summer. If it does, it will be
interesting to see how customers react to a shortage of the
cheapest iPhone ever produced.
Will they wait for more units to arrive, or will they cave and
purchase a slightly more expensive model because Apple already
lured them into the store?
Louis Bedigian is the Senior Tech Analyst and Features Writer
of Benzinga. You can reach him at 248-636-1322 or
louis(at)benzingapro(dot)com. Follow him
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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