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Apple to release low-cost iPhone in emerging markets

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Tim Cook, CEO at Apple Inc.

Tim Cook, CEO at Apple Inc.

According to some sources familiar with the matter and DigiTimes happens to be one of them, Apple Inc. is to release the low-cost iPhone in China and other emerging markets later in 2013. Analysts believe that the new low-cost iPhone will have a price tag between $200 and $250. The launch of the low-cost iPhone comes as Apple Inc. wants to have a bigger market share in China, which is the biggest mobile market, and other emerging markets as competition among smartphone makers is getting more fierce.

Low-cost iPhone

Rumors on the possible launch of the low-cost iPhone come as Apple Inc. saw its share price drop as much as 20 percent in the past three months. The company decided to release its low-cost iPhone which is expected to have not only a larger display but a new exterior design as well.  All these characteristics, which are usually present in high-end models, are designed to lure new customers to the company.

Yet analysts cannot agree on how the company will make its new smartphone cheaper. Some believe that Apple Inc. might be even forced to choose cheaper components and materials to launch its low-cost iPhone. But cheaper components are not in line with the company's strategy.

The new low-cost iPhone is to be released in China and emerging markets in the second half of 2013. According to some sources, the launch of the Apple Inc.'s new device might take place in June or July. As it was stated by sources, the new low-cost iPhone would cost between $200 and $250.

Apple Inc. is rumored to launch the new low-cost iPhone in emerging countries as it has been enticed by sales of its 7.9-inch iPad mini in China. Analysts note that, on one hand, the release of the Apple Inc.'s device in emerging markets would probably result in gaining unit share. On the other hand,  Apple Inc.'s revenue would remain more or less unchanged.

Competition sharpens

Competition is growing in the smartphone world and smartphone makers are trying to weaken each other. Apple Inc.,  which is said to be the most famous smartphone maker in the world, has been hit by competition in the market. Samsung Electronics Co. is believed to be the biggest threat, yet other smartphone makers do not give up and they want to get their pieces of cake as well.

Competition is getting more and more fierce and Apple Inc. feels that. Back in October 2012, the company reported a 25 percent growth in its final-quarter profits, yet it did not meet analysts' estimates.

While Apple Inc. has been struggling to growing competition, there are still a few markets to conquer. Analysts note that emerging markets, including China, are these markets where the future growth will have its roots. Therefore, it is not surprising that Apple Inc., HTC Corp. and others want to get in there. China itself is the biggest smartphone market, sharp and fierce competition is likely to be seen there. Apple Inc.'s iPhone enjoys popularity especially in the U.S., but it loses with Android smartphones in the global market.

Apple Inc. believes that the China's market is an opportunity for growth. Yet will the rumored low-cost iPhone conquer China and other emerging markets?

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