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Apple May Field Cheaper iPhone

The company recently introduced an iPad mini that’s smaller and cheaper than the standard iPad but there’s only been one iPhone

In what would be a major strategy shift Apple is reportedly considering selling a "lower-end" iPhone later this year to meet competition from Android, which has been eating Apple's lunch with its multiple models.

The Wall Street Journal said late Tuesday that the cheaper iPhone, which could impact Apple's healthy margins unless it attracts the non-iPhone consumer, could look like the classic iPhone but come in a polycarbonate plastic case rather than the iPhone 5's up-market aluminum housing.

The paper also said "other parts could remain the same or be recycled from older iPhone models."

The company recently introduced an iPad mini that's smaller and cheaper than the standard iPad but there's only been one iPhone with different storage capacities since the dingus was first introduced.

The Journal says Apple has toyed with the idea of fielding a cheaper iPhone since 2009 and developed designs ahead of the launch of the iPhone 4 in 2010. It reportedly dropped the idea out of concern a second iPhone would "complicate its manufacturing processes." Instead it kept selling older iPhone models at lower prices.

The iPhone 5, which starts at $649 in the US without a contract, is way too expensive in countries where carriers don't subsidize the widget and Androids cost less.

In America, the iPhone starts at $199 with a two-year wireless contract and older 4S and 4 models are available for around $99 or go for free with a two-year contract.

Bloomberg then weighed in with word that the putative phone, which may be smaller than the classic iPhone, has been in development for almost two years - evidently employing cheaper components - and that Apple is thinking of selling it for $99-$149.

The wire service said "Apple was also considering a more versatile version that would work on multiple wireless networks, according to people who were briefed on the plans."

A Bloomberg source reported that Apple has talked to at least one of the top American wireless carriers about the widget.

Meanwhile, Apple CEO Tim Cook is on a secret mission to China where he met with the government's IT minister and may be calling on China Mobile, the country's largest telecom, which has yet to succumb to Apple's charms. The Chinese market is critical to Apple.

IDC reckons Android represented 75% of smartphone shipments in Q3 versus Apple's 15%. The iPhone represented more than half of Apple revenues last year.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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