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A cheaper iPhone? Don't hold your breath, Apple says

Still, at least one analyst believes Apple would miss out on a big opportunity if it didn't make a budget iPhone in 2013. 

By Matthew Shaer / January 10, 2013

An Apple store in Toronto. Apple exec Phil Schiller told a Chinese newspaper today that Apple was not planning on producing a cheaper iPhone.

Reuters

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Yesterday, news broke that Apple was working on a new, cheaper iPhone, which would presumably be targeted at budget-conscious shoppers and developing markets overseas. One possibility, the Wall Street Journal reported, was an iPhone that was shaped like the iPhone 4 – boxy, in other words – but which used a polycarbonate plastic casing instead of the aluminum body used on the iPhone 5, thus saving on costs. 

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All of this sounded mighty fine to reporters. The only problem? Apple says the Journal report is a bunch of hokum. Speaking to Chinese newspaper Shanghai Evening News this week, Apple exec Phil Schiller said that "every product that Apple creates, we consider using only the best technology available. This includes the production pipeline, the Retina display, the unibody design, to provide the best product to the market." 

In case his point wasn't clear enough, Schiller added the following statement, according to The Next Web: "Despite the popularity of cheap smartphones, this will never be the future of Apple’s products. In fact, although Apple’s market share of smartphones is just about 20 percent, we own the 75 percent of the profit." Writing over at CNETChris Matyszczyk characterized Schiller's responses as "a declaration that can be roughly summarized as hah." 

A couple points to make here. First, there's no guarantee that if Apple was working on a less expensive iPhone that it would advertise it to the world; the device could be in development, and Apple is just choosing not to discuss it now. Late Apple CEO Steve Jobs pooh-poohed the idea of an iPhone with a larger screen – then along came the iPhone 5, which has a larger screen. 

Second: A cheaper iPhone would probably sell very well. 

"We believe the opportunity for Apple is too large to miss as the low-end market is growing significantly faster than the high-end smartphone market," Piper Jaffray analyst Gene Munster wrote in an investors note obtained by CNET. He added that he believes Apple is still planning a budget iPhone launch for 2013. 

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