Apple to start making a cheap iPhone – reflects emerging Asia/ developing markets focus

by on Jan.11, 2013, under Everything

Aiphone perfect storm is growing in Asia – a combination of growing individual wealth, lowering cost of access to smartphones and lack of fixed infrastructure.  In coming years there will be a sustained boom in mobile digital services such as we have not seen in western markets.

In these markets prepaid dominates and subsidised phone purchases are vanishingly small.  People hold onto handsets for much longer periods and a phone will often be handed from person to person a number of times before finally being trashed. The price point for new phones has to be low – much less than US$250 for mass market appeal.

Many smartphone retailers have responded to this with low cost Android handsets; indeed, many are Asian based.  Until recently Apple has been notable for ignoring Asian markets (except to access low cost manufacturing).  They have (quite rightly) been following a halo brand strategy in western markets – designing objects of desire and positioning themselves as the premium option.  Customers in developing markets also see Apple products as desirable but Apple has priced their wares out of reach for most.

However a number of recent announcements shows that Apple’s focus may be shifting.

In recent months Apple has opened iTunes to many new markets in Asia and other developing markets for the first time.  Of course, what use is a digital storefront if you don’t have any customers using your hardware?

I have been anticipating a cheap iPhone for Asia though I had not expected it until sometime in 2014 or 2015.  However the growing rumours are that Apple will announce such a device this year.

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