Apple plans to release a less expensive iPhone 4 within weeks, in order to nab lower-end customers in emerging markets such as China.
According to Reuters, Asian suppliers started pressing a lower-cost version which will include an 8GB flash drive, currently being manufactured by a South Korean company. It is set to arrive on the market the same say Apple announces iPhone 5, according to sources close to the matter.
Apple wants to be part of the market currently dominated by Nokia Oyj, which is slated to release a Windows Phone sometime by the end of the year, according to current rumblings.
It is also apparently in talks with China Mobile Ltd and China Telecom Corp Ltd.
"A lower-priced version of iPhone 4 seems to be a necessary evil at this point in the iPhone adoption cycle, especially in emerging markets where the average income of individuals is much lower," said Channing Smith, co-manager of the Capital Advisors Growth Fund, which owns Apple shares.
"Apple may want to push into the emerging market segment, where customers want to switch to low- to mid-end smartphones from high-end feature phones, which usually cost $150 to $200," said Yuanta Securities analyst Bonnie Chang. "But I think for an 8-GB iPhone 4, the price is hard to go below $200, so Apple will still need a completely new phone with low specifications for the emerging markets."
An iPhone 4 without contract commitments now costs over $600.
It is rumored that iPhone 5, will be launched by the end of September, and is said to include a larger touch screen, better antenna and an 8-megapixel camera and production capacity for up to 45 million units are being planned by factories Hon Hai Precision Industries Co Ltd and Pegatron Corp.
It is also being rumored that Sprint is to start selling iPhone 5 in October.