A cheap iPhone would add another 20 percent from 10 percent of the Chinese market currently addressed by the iPhone 5, the analyst said today. Smartphone prices begin to stabilize in China, which will open up the market for such a phone. But an agreement with China Mobile is also a key element.
Apple currently sells the iPhone to Chinese consumers through China Unicom and China Telecom. The company tried to concoct an agreement with China Mobile, the largest carrier in the country, but has encountered obstacles.
However, the analyst sees China Mobile as a major contributor to the growth of the iPhone, citing a few different factors. First, Apple will launch a new model Mini. Second, the legislation for TD-LTE licenses and number portability could happen later this year or in 2014. And thirdly, China Mobile would be more open to subsidize high-end smartphones on a TD-LTE network.
"We believe Apple could launch iPhone Mini $ 330 (about RMB 2,000), in line with the flagship of China's Lenovo, Huawei, ZTE, Coolpad and" Huberty said in a note today investors. "Even in a scenario of low 40 percent gross margin rate and third cannibalization iPhone (flattening growth in shipments legacy iPhone), we consider conservative, Mini iPhone adds additional revenue and gross margin dollars."
The 330 would be the price of unlocking the phone in China. Launched in the summer, mini iPhone would seek other emerging markets beyond China, as investors note.Rumors a cheap iPhone gained last month following stories The Wall Street Journal and Bloomberg claiming such a device is on the horizon.
Several analysts have also provided a cheaper iPhone on the agenda for later this year.
Strategy Analytics analyst Neil Mawston also sees a Mini iPhone to Apple's future, but do not think it will until 2014 at the earliest.
