Cheaper Apple iPhone reportedly on the way

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

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

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. 

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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. 

For more tech news, follow us on Twitter@CSMHorizonsBlog

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