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Analyst sees a no contract, pre-paid $350 Apple iPhone coming in September

Posted: , by Alan F.

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Analyst sees a no contract, pre-paid $350 Apple iPhone coming in September
It seems that if you put 100 Wall Street analysts in a room, each one would have a different idea of what Apple is going to do next with the iPhone. Although most see a September launch of whatever the tech giant has under its sleeve, the form that the phone takes is different with each analyst's report. Chris Whitmore of Deutsche Bank expects Apple to produce a low-end, contract free version of the Apple iPhone, priced at $350-$500. This model would be aimed at those who do not want to be locked into a 2 year contract and would rather pre-pay for service. The device, which he calls the Apple iPhone 4S, would be released alongside the next gen iPhone 5 and would be perfect for the two-thirds of the 1.5 billion customer cellular market that uses pre-paid service.

According to Whitmore, Apple has shipped 87 million units of the iPhone over the last two years which is only a 6% penetration of the market. The analyst sees Apple aiming to increase that percentage and feels that a $349 low-end variant of Apple's touchscreen phone would allow the company to keep a high level of profitability. He figures that an unlocked Apple iPhone 4 at $649 gives Apple a 70% profit margin. A low-end iPhone, he figures, is similar to the $229 iPod Touch which has a 38% profit margin. By adding an RF module to the iPod so it can make and receive phone calls, and pricing the device at around $350, Apple could score a respectable 53% profit margin.

With pre-paid users dominating in some countries, a pre-paid Apple iPhone could be a good way for Apple to increase it's share of the cellular market. In China, a market that Apple would like to increase its presence, a whopping 85% of cellular customers use a pre-paid account.

source: AppleInsider

A breakdown of cellular use by country shows that in some places, pre-paid cell use dominates

A breakdown of cellular use by country shows that in some places, pre-paid cell use dominates


11 Comments
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posted on 27 Jun 2011, 08:37 3

1. protozeloz (Posts: 5375; Member since: 16 Sep 2010)


$350 sounds like a steal, many people will get it :D

DISCLAIMER: this is not a sarcasm, thank you.

posted on 28 Jun 2011, 08:50

9. daniel_bargs (Posts: 323; Member since: 27 Nov 2010)


i think i will. in case it will be released in the philippines... the 70 million prepaid users will have iphones haha. but i prefer android. maybe when that time comes... 1ghz phones will be $200 in the market :)

posted on 27 Jun 2011, 09:17

2. ryq (unregistered)


samsung and to certain extent, htc, is forcing apple to change its strategy. next we'll probably see iphone and ipad supporting flash.

posted on 27 Jun 2011, 12:51

5. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


I don't see Apple ever adding flash to iOS. It's not hurting their sales and at this point about 75% of video has been converted to html5

posted on 27 Jun 2011, 10:38 1

3. foosion (unregistered)


A $350 ipod touch with 3g phone and GPS would be an incredible value and sell a *lot*. A touch will just the ability to talk and text wouldn't be nearly as good.

The danger, of course, is that it would cannibalize the sales of higher end phones.

posted on 27 Jun 2011, 12:50 2

4. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


This would really help Apple with overall marketshare and to compete with cheaper androids.

posted on 27 Jun 2011, 18:26 1

6. nb2six (Posts: 298; Member since: 27 Apr 2011)


Has anybody else ever thought that if the iPhone became that easy to obtain at a pricepoint like that, it will become more and more common as far as the number of people carrying it and in that happening loosing it's appeal as a "luxury" type of phone. When it comes down to it and I'm not trying to start a fight, lots of people chose the iPhone because it separated them from everybody else but if you can get an Apple device that does exactly the same at a cheaper price wouldn't that take away that special feeling that demographic gets? That's why I don't see Apple doing this in the future if ever just for that reason alone because Apple nation wants to be different.

posted on 27 Jun 2011, 19:35

7. SomeGuy (unregistered)


Very true. That's why I see this as not very probable. It's something a sprint rep explained to me once, with the $49 iPhone 3GS... It cheapens the phones image.

posted on 27 Jun 2011, 19:36

8. SomeGuy (unregistered)


The stats on the amount of prepaid phones in different companies is more interesting than the rumor (which isnt very likely, IMO).

posted on 28 Jun 2011, 10:54

10. InspectorGadget80 (Posts: 6422; Member since: 26 Mar 2011)


Why spend 300$ on a pre paid phone? won't have full features like the contract version

posted on 21 Jul 2011, 14:01

11. Harry Sanborn (unregistered)


Unlocked, GSM prepaid phones are pretty much the norm outside of the United States

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