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Cheaper Apple iPhone reportedly on the way

Apple is prepping a cheaper iPhone, according to one new report. 

By Matthew Shaer / January 9, 2013

An employee cleans an advertisement plate at an Apple dealership on the eve of iPhone 5's release, in Wuhan, China, on Dec. 13, 2012. A budget iPhone may be on the way.



Apple, under increasing pressure from competitors, and eager to break into developing markets, is actively working on a less expensive iPhone

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That's the word today from The Wall Street Journal, which says the device would likely resemble the boxy iPhone 4 and iPhone 5, but be built out of far cheaper materials. The Journal targets the smart phone for a launch later this year – a timeframe that may mean Apple will release both a new top of the line iPhone and a bargain counterpart at the same time. (If past years are any indication, the successor to the iPhone 5 will launch in the fall of 2013.) 

Apple won't comment on the rumors, but speculation about a cheaper iPhone has been rampant for years now, and the Journal is rarely wrong about this kind of thing. 

A couple things to note: The early success of the iPhone, which launched in 2007, was in large part due to its status as a "luxury" device. Consumers were buying a good phone, but they were also buying a status symbol. And because so many millions of Americans seemed to have no problem with forking over a relatively hefty chunk of change for iPhone, Apple never really had a reason to roll out a budget model. 

IPhone sales are still extremely strong – iPhones account for 48.1 percent of the American smartphone market, Kantar Worldpanel says, compared to the 46.7 percent claimed by Android. But the iPhone 5 launch missed a lot of analysts' forecasts, and there has been widespread concern that the magic is rubbing off the iPhone brand. A cheaper iPhone would allow Apple to reach a whole new audience in the US. 

It would also allow it to reach consumers in burgeoning markets such as India, where Apple does not have the foothold it does here. 

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