Will Apple Go Downmarket With Cheaper, Prepaid-Compatible iPhone?

When Apple (AAPL) rolls out its next-generation, high-end iPhone 5 -- a launch expected to take place in September -- one analyst is predicting the company will also shoot for the low-end market by introducing a second, inexpensive iPhone model that's capable of working with prepaid phone plans, says a CNBC report.

Such a move would make sense, given the setback Apple has suffered over the past 12 months as Android-based phones took the lead from the iPhone. Apple must compete against an army of smartphone makers using Google's (GOOG) Android operating system, offering a variety of phones in a wide range of price points.

According to the report, which cites a Deutsche Bank (DB) analyst note, Apple is considering pricing a prepaid calling capable iPhone at $349. Currently, for an iPhone 4 with 16 GB that can be used with the carrier of your choice -- and isn't locked into a two-year contract with a wireless company -- consumers must pony up $649. That iPhone 4 also sells for $199 with a two-year carrier service agreement.

If Apple wants to establish a meaningful presence in emerging markets, offering a phone that can handle prepaid calling plans is a good start. Analysts note that customers in emerging markets tend to favor prepaid phones, as well as inexpensive handsets.

While Deutsche Bank's analyst expects to see a new low-end iPhone model from Apple, an analyst with BMO Capital Markets (BMO) believes Apple's solution will be to trot out its older generation 3GS models, according to a Barron's report. Apple currently sells a 3GS with 8 GB for $49 with a two-year AT&T contract.

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rdins4

I just read this ... http://www.cnbc.com/id/43578057 Apple is going to give the 3GS away free with an AT&T contract, thats a sweet deal because thats the same phone I have (and I paid alot when I bought it).

June 29 2011 at 6:18 PM Report abuse rate up rate down Reply
nbsfbl

Apple is a peculiar company. It professes this wonderful image, but if that is the case:
why is there 52 million hits for googling "apple sucks"?

June 29 2011 at 2:28 PM Report abuse rate up rate down Reply
gunner938

I HAVE THE IPOD TOUCH, HAVE HAD PROBLEMS GETTING TO RECOGNIZE MY VERIZON WIFI, WHEN I GO TO ANY APPLE STORE, THE HELP TALKS TO YOU FOR A FEW MINUTES AND TAKES OFF, CAN NOT BLAME THE HELP SO MUCH, TO MANY PEOPLE NOT ENOUGH HELP, SEEMS APPLE WANTS TO SELL BUT THE FOLLOW UP HELP IS LITTLE TO NONE

June 29 2011 at 2:28 PM Report abuse rate up rate down Reply
mmmk

golden rule: if its apple your getting ripped off

June 29 2011 at 12:08 PM Report abuse rate up rate down Reply
budwsr25

Cell phone have become a HUGE waste of money. The average cell bill is $80.00 per month. That is crazy for a phone.

June 28 2011 at 3:02 PM Report abuse rate up rate down Reply
2 replies to budwsr25's comment
lisiliz

How is that crazy for a phone? well lets see, u pay about 30-40 bucks to get online (cable or dsl), you would pay about 30-40 bucks for a house phone. With a cell phone, at least you get to go online while in the park or at a store and talk to someone about where you'll meet up while checking out the new restaurant online. I think it's very well worth it. and with some apps, whatever you save on your phone, ends up synced to your home computer.
I don't mind the 70 bucks i pay for unlimited everything

June 28 2011 at 7:10 PM Report abuse +2 rate up rate down Reply
1 reply to lisiliz's comment
rdins4

I haven't had a landline in 8 years, I just use cell for everything. Get a headset for it.

June 29 2011 at 12:12 AM Report abuse +1 rate up rate down
rdins4

I used to think that with my old phone, I disagree with the iphone I have bought. I use it for way more stuff so its more then just a phone, and it's not as costly as I thought. At least through AT&T you can do a smaller data plan for $15 for 200 meg (more then enough, many services require $30 month), and you can get 200 text msgs a month for $5. I thought it would cost alot more ....

June 29 2011 at 12:11 AM Report abuse +1 rate up rate down Reply
donut999

I am going to wait until someone, probably apple, comes out with the product that will turn the whole computing/communication market upside down. See a configuration where the phone will dock on an ipad type of device about 60% the size of the current one. The phone will be a fully functional inet phone, but when mounted to pad will become a small laptop and when docked you will be able to use the pad to operate phone or use pad for all the capabilities the phone has. No more laptops, no more big pads. Hurry. Then, we will need a sling holster or some other type of vest to carry both of these light weight wonderful items. Maybe like you see law enforcement
gun holsters except light weight material and can be worn over or under other garments.

June 28 2011 at 11:11 AM Report abuse +1 rate up rate down Reply
santaferosie

Wonderful idea, I would love an i-phone but am not one to commit to a contract, i have had a trac fone for years and love it, no bills, no hidden charges, and it works where friends phones have not, so bring on the new i-phone for me

June 28 2011 at 10:47 AM Report abuse +1 rate up rate down Reply
1 reply to santaferosie's comment
rdins4

Use what makes you happy. I don't mind the 2 year contract because that goes by pretty quick, and they pick up a big part of the phone cost.

June 29 2011 at 12:13 AM Report abuse +2 rate up rate down Reply
crazybobmt

phone smone make them simpler easier to use bigger buttons and waterproof for those uh oh moments..my alcatel cheapy has camera fm music musicplayer n picture storage n bluetooth but the instructions are unfathomable..

June 28 2011 at 10:41 AM Report abuse +1 rate up rate down Reply