For the greater past of last year the rumor mill has been obsessed with a number of things. Apple iPad Mini was one of the few products that the rumor mill just did not want to let go. Apple finally released that product earlier last month, so now there are no more rumors about it anymore, thankfully. There’s another product that the rumor mill has been taking about consistently. In the past we have heard many reports about a cheaper subsidized iPhone from Apple.
Once again, this cheaper iPhone is in the news. A few months back even talking about this might have sounded absurd. Now that the company has been taking a new direction and we know that folks at Apple have been venturing out of their comfort zones, if the company could release a smaller iPad, there’s nothing really stopping it from releasing a smaller and a substantially cheaper iPhone as well.
Infamous Apple analyst Gene Munster is the one behind this headline. He has been unabashedly vocal about the full fledged Apple HDTV set that has failed to materialize up till now. Munster recently said that Apple will release its TV set in November 2013 and that screen sizes will range from 42″ to 55″. The company itself hasn’t said a word about this device, and we should also keep in mind that analyst’s predictions have never exactly been fully spot on.
This time, Munster is back again but with news of a cheaper and subsidized iPhone. Ever since the iPhone came out back in 2007 it has utilized one single model of sale. Apple sells the device to carriers, which then offer it to their customers for a price as low as $199 coupled with a minimum two year contract. These iPhones are locked to their particular networks and over two years the customers ends up paying more than they would have had they purchased a factory unlocked iPhone directly from Apple.
The carrier subsidy model isn’t popular in emerging markets in South Asia and South East Asia. In those countries customers generally prefer buying a factory unlocked iPhone, and they buy them like crazy because iPhones are very popular in these particular markets. Therefore Munster is of the view that in 2014 Apple will take a huge leap of faith and announce a smaller and cheaper iPhone, possibly priced around $200 specifically geared towards markets where the carrier subsidy model is not profitable.
There remains a big question that needs to be answered. Even if this smaller iPhone gets popular in those countries, what about established markets such as USA or Europe where the carrier subsidy model works perfectly? Wouldn’t the smaller iPhone lose out on sales there? Those are questions that will only be answered in due time.