New iPhone This Fall To Be Cheaper At $99?

Rumors are abound regarding the next iPhone, and if the rumor mill is to be believed, it will be a cheaper, more affordable version of the popular Apple smartphone, rather than a more powerful next iteration in the series. Now, multiple media outlets are beginning to report some interesting facts about the next iPhone, including some ways Apple could be cutting costs on the device.

Blog iLounge reported that the upcoming cheaper apple phone will still have the 4-inch screen size as the iPhone 5, but instead of being made out of glass and aluminum like 5, it will instead be manufactured in plastic, as a likely cost-cutting measure. The rear edges of the device will be rounded, which the blog reports is akin to current look of the iPod classic.

Rumors of a cheaper iPhone started earlier this month with a report by the Wall Street Journal. The WSJ reported that Apple had internally experimented with cheaper “budget” versions of the iPhone in the past, but they’re now planning to launch one this year. Other rumors have pinned the cheaper iPhone as coming out in October, and Bloomberg added to the rumor fever pitch by adding that the price of the new cheap iPhone will come in between $99 and $149 with a new contract. Currently, the iPhone 5 costs $199-$399 in the United States.

Change in Apple’s iPhone Strategy

The decision to go with a current but cheaper version of the iPhone would be a change in strategy for Apple. A few years ago, Apple started the practice of selling the last generation iPhone at a discounted price. Currently, the Apple Store is offering the iPhone 4S for $99 while the iPhone 4 (almost three years old at this point) is being offered for free with a two year contract on the company’s website.

A new cheaper iPhone would also mimic Apple’s recent moves with the iPad line. The recently released 7-inch iPad Mini offers a slightly smaller and cheaper alternative to the full size iPad. Over their entire corporate history, Apple has had success with this strategy of releasing value priced variants of their flagship products. For example, the iPod Mini and iPod Nano eventually became more popular than the original iPod (later renamed iPod Classic),

While the iPhone has more market share than any current Android manufacturer, some market analyses out today say that combined, Android makes up 70% of the smartphone marketshare, thanks in part to a wider variety of phones coming in different prices and sizes, and often offering a featureset comparable to what the iPhone offers. A cheaper iPhone by Apple could be an attempt to capture some more price sensitive customers who aren’t interested in previous years’ versions of the iPhone.