Rumours have been circulating that Apple will be launching a budget iPhone, which is targeted at emerging markets. It is speculated that Apple will release a cheaper iPhone 4 within weeks, thereby jeopardizing profit margins to win lower-end customers from rivals such as Nokia. Asian suppliers have begun manufacturing a lower cost variant of the hugely popular smartphone with a smaller 8GB flash drive that will arrive around the same time the Cupertino-based company unveils its much anticipated iPhone 5.
Apple has stuck to higher end handsets, since they first launched the iPhone in 2007 and are now seeking out new markets to sustain their fast pace of growth that has gripped Wall Street. Apple are in talks with Chinese carriers China Mobile Ltd. and China Telecom Corp. Ltd who are both eager to carry the iPhone. Speaking about the budget iPhone 4, Channing Smith, Co-Manager of the Capital Advisors Growth Fund, which owns Apple shares said, “A lower-priced version of iPhone 4 seems to be a necessary evil at this point in the iPhone adoption cycle, especially in emerging markets where the average income of individuals is much lower.”
Analysts have stated that a cheaper phone risks cannibalizing Apple's premium iPhone model and pressuring margins. But, the California company needs one to expand its emerging market share. Apple who have always maintained high levels of secrecy regarding their products have declined to comment on the 8GB version of the smartphone. However, it is said that the flash drive for the 8GB iPhone 4 is being manufactured by a South Korean company. Apple currently sources its flash drives from Japan’s Toshiba Corp and South Korea’s Samsung Electronics Ltd. Samsung too, have not commented on the matter.
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