Apple's Cheap iPhone Might Not Be So Cheap After All

Apple is widely reported to be developing a lower cost iPhone to expand sales and market share around the world.

But how low-cost is low-cost? Probably not as low-cost as you think.

J.P. Morgan analysts Gokul Hariharan and Mark Moskowitz think Apple’s lower priced iPhone is actually going to sell for $350. This would make it more of a mid-priced smartphone than a low-priced smartphone.

In Apple’s most recent quarter it reported an average selling price of $613 for the iPhone. This includes a mix of high-end iPhone 5s, and lower cost iPhone 4s.

John Paczkowski at All Things D wrote up their note. He’s usually a smart Apple writer, so the fact that he’s writing this up adds a little more credibility to the idea.

Paczkowski points out that Apple priced the iPad Mini at $329 when everyone was thinking Apple would sell it for under $300. Despite pricing the Mini above the price of the Kindle Fire HD, or Google’s Nexus 7 tablet, the Mini is the best selling tablet on the market.

Apple likely thinks that iOS is worth a slight premium to a cheap Android phone.

Hariharan and Moskowitz estimate Samsung has 30%-35% of the mid-smarphone market. They believe Apple could swoop in and take 20-25% of the market.

They’ve also included this moderately confusing chart to demonstrate how many units that could mean for Apple. We think this suggests a single-to-double digit million units.

JP Morgan low price iPhone chart

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