iPhones to remain premium for now; no cheaper iPhone coming

In his interview to a Chinese newspaper, Phil Schiller, Apple's Marketing Chief, has rubbished all rumours about the company developing a cheaper version of its premium smartphone – the iPhone. In his reply to queries about the latest speculation gathering steam, Schiller told the Shanghai Evening News that the company will not develop a less expensive smartphone just to expand its market share. The Chinese newspaper quoted him as saying, "Originally, many in the Chinese market used feature phones (regular wireless phones). But now a few companies are starting to use cheap smartphones to take the place of feature phones. But this is not a direction that we want to be heading in with our products." Speculations, rumours and endless discussions are characteristic of pre-Apple launches; Apple, however, scarcely replies to them. In this case, though, Apple confirmed that the interview indeed took place.

No cheaper iPhone coming

A recent Wall Street Journal report had indicated that according to sources close to Apple, there was a lower-end iPhone in the making, which could possibly launch this year. In November last year, there were reports about Apple being in plans of launching a cheaper handset for markets like India and China, which could then become big markets for the company's products. Apple products have long been synonymous with the word ‘premium’ – a factor that has kept them beyond reach of several pockets, and with such report surfacing, it led people to believe that all that is set to change this year. Previously, while elaborating on what one could expect from the cheaper iPhone, the report quoted one of the people as saying that it would be similar in appearance to the standard iPhone, albeit with a 'different, less expensive body'.

Reports even suggested that the company was toying with the idea of reducing the cost of the smartphone by going for a different shell made of polycarbonate plastic, while adding that the other parts on the cheaper iPhone could be the same or be recycled from the previous iPhone models. However, at the time, the report noted with a hint of caution that the company may decide to not go with the plan altogether.

The iPhone 5's success is undeniable as five million handsets were sold in the first weekend of its launch. The handset has been selling pretty well in India too and the initial batch had sold out almost immediately. However, India is a tiny market for the Apple iPhone as it is priced considerably higher than its rivals. Analyst Gene Munster had, at the time, suggested that a less expensive version of the iPhone, roughly in the region of $200, will be launched by Apple in 2014. However, according to WSJ, the device in question may be here later this year.

Apple does sell handsets cheaper than the iPhone 5 in India, but they are previous generation models and the price of the iPhone 4S is at par with flagship devices from other brands. If Apple does intend to stay competitive in the Indian market, the brand will need to launch a budget handset and not an older handset with a lower price tag. However, Apple does not sell budget products and has never succumbed to the pressure of lowering its prices to match that of the competition.

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