The Newest iPhone Rumors Point To Apple’s Mass Market Ambitions


Credit: Getty Images / Feng Li

We’re not yet into September, and Apple (NSDQ: AAPL) has yet to announce any events for the autumn, but the public is hungry for Apple news, and nature abhors a vacuum. Enter: more unattributed reports about what we might expect come the next generation of the iPhone. The latest are that Apple is producing a low-cost handset, and further expects huge numbers of shipments for a new, high-end device. If true, they point to some of the biggest indicators yet of the company aiming for more mass-market penetration.

The report, published this morning by Reuters, notes that the lower-end device will look similar to the current iPhone 4. One feature that will bring down the price is an eight-gigabyte hard drive, instead of the 16 GB storage that forms the cheaper of the two current iPhone 4 models.

The sources — all uncredited, of course — said the new device could launch “within weeks.”

Meanwhile, some news on what Apple might be planning for the high-end device, too. It will have a bigger screen, a better antenna and an eight-megapixel camera. This device, says the report, is due out at the end of September.

This is not the first time that we have heard that Apple is developing a low-end device — it has even picked up its own name, the iPhone 4S. Nor is it the first time we’ve heard that the new iPhone (so-called “iPhone 5”) could have improved camera, touchscreen or antenna. What’s interesting is how this particular report is coupled with the other about shipment levels for the more expensive new model.

The source tells Reuters (NYSE: TRI) that the two manufacturers making the iPhone 5 — named as Hon Hai and Pegatron in the report — have been told to prepare for initial production of 45 million devices. That’s more than double what Apple sold in its last reported quarter, Q2 — 20. 34 million/

Taken together, that points to a new approach from Apple, aimed at the mass market. On one hand, the lower-end device would be an “entry-level” smartphone, both for newer users in developed countries and those developing regions where the average selling price for mobiles is far lower than the $649 that a user could expect to pay for an iPhone outside of contract. (Prepay, using phones bought out of contract, is most dominant among more cost-conscious users.)

On the other hand, doubling shipments of the more expensive model points to Apple’s confidence of how its more expensive product will place in an ever-growing user base in smartphones: Some countries like Australia are now approaching 50 percent of all mobile consumers on smartphones.

Asia, notes the report, is an increasingly important target market for Apple. Revenues from Asia-Pacific tripled in the last quarter to $6.3 billion out of total revenues of $28.6 billion. Asia-Pacific includes Greater China in Apple’s accounting (others like Nokia (NYSE: NOK) break out China from the rest of the region).

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