Apple's ‘cheap’ iPhone 5 Mini for India, China: analyst

Cupertino-based Apple Inc. may have finally decided to step down from its ‘premium’ pedestal, and is working on a sub-$200 iPhone model, according to Gene Munster, senior research analyst at Piper Jaffray.

According to a note that Munster has sent out to investors, Apple plans to build a sub-$200 (Dh730) handset to build its market share in India and China where network carriers are not prepared to subsidise handset costs in order to tie potential customers into long-term contracts.

Munster is a managing director at Piper Jaffray, specialising in Internet, and his coverage includes Apple, Google, Yahoo!, Amazon, Baidu, and MercadoLibre.

Apple’s premium pricing has meant that its iPhone has lost market share to Android-based devices, particularly to the Samsung Galaxy S3. With new Windows-based competition emerging in the shape of the reasonably-priced Nokia Lumia 920, it is perhaps time for Apple to launch an entry-level model of its popular smartphone, especially for price-competitive Asian and African markets.

According to the latest smartphone sales data published by Gartner, Android currently accounts for over 70 per cent of the world smartphone market while Apple has less than a 15 per cent share.

In addition, with the Asia-Pacific region accounting for more than 60 per cent of the world’s population, and 53 per cent of worldwide smartphone sales in the third quarter of 2012, ignoring the region will take its toll on device manufacturers.

With a lower GDP per capita in most of the Asian countries, Apple’s products have gained traction with only a small percentage of elite customers. If and when Apple releases an entry-level, ‘cheap’ iPhone, it should be a big hit among the younger customers although the brand’s elitist image may suffer irreparable damage in some of the Western markets.