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Apple to release ‘budget’ iPhone

This summer, Apple is rumoured to be launching a cheaper version of the iPhone.  The model will have much the same features as the current iPhone 5, but the expensive casing will be replaced with a plastic substitute and no retina display.

The primary target user for the phone will be the young middle class in BRIC countries.

Jeremy Horwitz of iLounge, told the Telegraph: “One of our sources claims that Apple’s iPhone prices remain too high for most mainland Chinese customers — the iPhone 5 hardware alone starts at $849 there, versus the iPhone 4 at $500, in a country where the average annual salary is around $3,000 per person.”

“The source has said that mainland Chinese iPhone 5 sales are already tapering off as a result of the pricing, which is higher than in Hong Kong. A budget iPhone model would help sales in populous but underdeveloped countries to grow.”

The budget phone is rumoured to cost around £220.  Whilst the main markets will be the likes of India and China, it will also be interesting to see the effect it will have on sales in Europe and the US, where Apple already dominates the phone market.

Will users care about the material of the phone, as the majority of existing users put the phone in a protective case anyway?  For the sake of saving £300, probably not.  But it will surely make the iPhone accessible for a lot more people, which we at 3Squared believe can only be a good thing.