UPDATED 11:39 EDT / AUGUST 08 2013

NEWS

Why Apple Needs to Launch an iPhone Mini

According to the Consumer Intelligence Research Partners, price-conscious, first-time smartphone buyers will almost certainly avoid choosing an iPhone because the things are just too damn expensive.

“Previous smartphone owners buy Apple iPhones much more often than first-time owners,” said the CIRP. “Almost 50 percent of previous owners buy an iPhone, while under one-third of first-time owners buy an iPhone.”

For Samsung and HTC, first-time buyers aren’t such an issue, with the level of interest in their products being roughly the same as that of previous smartphone owners. Somewhat surprisingly, more first-time smartphone buyers actually prefer LG, due to its cheaper offerings.

The problem with iPhones is that they’re too expensive, and first-time smartphone buyers are likely to be a bit too apprehensive in spending that amount on a device they essentially see as a replacement for their ‘telephone.’  What if they don’t like it? What if they can’t use it?  What if it gets lost or stolen?  What if there’s something better than the iPhone available at a cheaper price?

These are just some of the many questions first-time buyers have to consider, besides dealing with the fact that newer and better devices come along every few months.  Most consumers cannot afford to purchase a new device each time Samsung or Apple introduces a new one, so of course they’re very careful when choosing what to buy.

Does this mean Apple should just be content appealing to smarter, more knowledgeable smartphone buyers and its legion of fanbois? Well, maybe not…

For one thing, we are expecting to see a new iPhone unveiled soon (September) and dozens of fanbois will no doubt be itching to upgrade to the latest model the moment it comes out.  The problem is that it will probably be priced somewhere in the $500-$600 range. So how can Apple entice more consumers, especially first-time smartphone buyers?

Simple: by offering a lower-cost, slightly lower-end iPhone.

We’ve heard plenty of rumors about this one, and with Apple’s financial fortunes going flat of late, the company is likely to take note at this disinterest in its products among smartphone virgins. The iPhone 6, or more likely, iPhone 5S, is all but a given, but there have been rumors going around that Apple will actually be unveiling two or even three devices come September.  Aside from its high-end phone, there’s been talk of a phablet to compete with the Samsung Galaxy 2, and then there’s the “iPhone mini,” which is expected to be a lower-cost version of the iPhone.  These rumors haven’t been confirmed, but if Apple does decide to release a cheaper iPhone, this could be the kick it needs to regain the market share lost during the second quarter of 2013.

“The iOS decline in the second quarter aligns with the cyclicality of the iPhone,” says Ramon Llamas, Research Manager with IDC’s Mobile Phone team.

“Without a new product launch since the debut of the iPhone 5 nearly a year ago, Apple’s market share was vulnerable to product launches from the competition. But with a new iPhone and revamped iOS coming out later this year, Apple is well-positioned to re-capture market share.”

And if Apple also decides to take the wraps off of something cheaper and possibly a little bit smaller, there’s no telling what it could do.


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