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Apple to target China and India with cut-price iPhone, analyst claims

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Apple will release a low-cost version of the iPhone to tap into the almost three billion-strong markets of China and India, an analyst has claimed.

Piper Jaffray's Gene Munster has said in a note to clients that Apple will start shipping a sub-$200 (£125) smartphone to the emerging markets by 2014, reports MacWorld.

A customer tests the new iPhone 5 at the Apple store in Hong Kong

© PA Images / Kin Cheung/AP



Munster, who is a long-time commentator on Apple's plans with varying degrees of accuracy, notes that the cheap price is required because China and India do not have the same business model as western markets of mobile carriers subsidising the prices of new handsets.

The high upfront cost of the iPhone is said to be opening the door to the emerging markets for cheaper phones running the Android mobile software.

According to sales estimates, there were 3.5m Android phones sold in China over the past three months, compared to 2.3m iPhones.

There has previously been a suggestion that Apple would launch an 'iPhone mini', offering a slimmed-down version of the main iPhone for a cheaper price.

It had been suggested that Apple would produce the iPhone Mini to capture emerging markets, but Munster said back in July that Apple would more likely look to innovate on the price of previous models.

"The biggest question we get is, 'Is Apple going to do a small iPhone, an iPhone mini'?," he said at the time.

"The reality is, based on our discussions with Apple, that they are probably not. In Apple's words they are going to do a 'continuation of their existing strategy'."

Apple iPhone 5 screen


This could mean that Apple will take an older model of the iPhone, such as the iPhone 4 or iPhone 3GS, and then price it aggressively to capture consumer interest in China and India.

However, Business Insider notes that Apple is not generally a company that offers 'cheap' products, as it instead looks to make a healthy margin upfront on all products sold.

Apple only recently launched its new iPad Mini, a small-screen version of the main iPad, but priced the product around £100 ($160) higher than rival devices, instead relying on the quality of its hardware and software.

Rather than innovating on price, Apple may instead seek to work with the mobile carriers in China and India to create more attractive offers around its products.

China Unicom and China Telecom have already announced that they will soon carry the latest iPhone 5.

RBC Capital Markets analyst Amit Daryanani expects a deal between Apple and China Mobile - China's biggest mobile network with more than 700 million subscribers - to follow in early 2013.

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