Gadgets

Is an iPhone Mini Coming Soon?

Apple's iPhone 5 | Apple Official Website

Apple’s iPhone 5 | Apple Official Website

Following the discovery of some unreleased iPhone prototypes last December, investment and research firm Topeka Capital is now confident that Apple is prepping up to introduce an affordable mobile phone by mid-2013. According to the research firm’s Brian White:

In late December, our research uncovered iPhones in different screen sizes for potential launch in May/June, allowing Apple to better bifurcate the market and pave the way for a lower-priced iPhone.

He went on to say that a June 2013 release date for the so-called “iPhone Mini” or “iPhone Air” would serve as the earliest point of entry for the device. Moreover, the purported device was given such name due to its rumored light weight because of plastic enclosures.

We believe a $250 to $300 price point for a lower-priced iPhone would make sense and 58% below the $649 price point for an unlocked 165 GB iPhone 5. A $250-$300 price range would also be competitive with China-based Xiaomi that offers high-end phone experience at a mid-range price of ~$320 in China.

Expanding Apple Market Reach with Low-Priced iPhone

Although a low-priced iPhone is expected to have a gross margin that is 10-15 percent lower than the existing smartphone models, White believes that the device’s expected price point will allow Apple to expand its reach in the smartphone market.

It could also broaden inroads in China, while opening up opportunities in other BRIC countries such as Brazil, India, and Russia. The said countries are believed to have the highest growth potential.

For example, we estimate that Apple was unable to address at least 60% of the smartphone market in 2012 (not to mention the feature phone market) due to high price point of the iPhone, while we believe a high percentage of the annual smartphone unit growth of 688 million between 2012 and 2016 units (i.e., from 717.5 million to 1.4 billion) as estimated by IDC, will be outside of the high-end market.

In relation to this, White believes that Apple will adopt a more affordable display, case, memory, wireless, camera, and processor. That is in order for the Cupertino-based company to shave down the retail price of its rumored iPhone Mini.

The case would be an interesting area of cost savings with a lower priced material (e.g., plastic) versus the aluminum unibody casing on the iPhone 5, while adding colors to excite consumers.

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