The company has a rather long-winded explanation why Apple is doing this, explaining that by offering a low-priced version of its iconic smartphone, Apple can raise its market share while passing time as it searches for the next innovation. ETrade points out that Samsung has been throwing money at marketing the Samsung Galaxy S III and the recently released Samsung Galaxy S4 and the figures are truly staggering. According to the parts supplier, the Korean based OEM spent $4.3 billion on advertising last year which is more than Apple, Coca-Cola, Microsoft and HP combined. The company also spent $5.4 billion on sales and marketing in 2012. All of this puts pressure on Apple to turn things around.
By offering a cheaper version of the iPhone, Apple hopes to compete in emerging markets like India and China. In those countries, low cost Android and BlackBerry units have sold well. Back in March, global investment house Credit Suisse forecast that such a model would cost consumers $329 off contract. Recently, Jefferies analyst Peter Misek told his clients that pre-production issues have forced Apple to delay the launch of the low cost Apple iPhone, the Apple iPhone 5S and the second iteration of the Apple iPad mini.
Thanks, Anonymous Tipster!