Launching a Cheap iPhone during this summer it seems more and more certain, but for now no one has given a correct "definition" of the phrase "cheap" since we are talking about a iPhone, that is, a product that is generally expensive. Those from Credit Suisse try to clear things up by saying that the cheap Apple iPhone would be half the price iPhone 5, that is around $329, if we take into account the fact that the iPhone 5 has a starting price of $650 in the USA.
How much money could Apple make from a cheap iPhone? Credit Suisse believes that Apple can make a lot of money. Based upon a teardown analysis, lower priced phones could have lower margins than the current iPhone but in line with corporate gross margins at 38 percent. At $329 retail ASP, CS believes a low end iPhone (3G device, 8GB of memory and same form factor as the iPhone 5) would be competitive versus rival products.
At such a low price, many wonder how Apple could make a profit, but Credit Suisse believes that Apple Lossless Audio CODEC (ALAC), can get a gross margin of 38% on the sale of each Cheap iPhone, that is, a little over $100. $329 is a low price for the USA, if we compare it to Europe and convert it to euros, the principle remains the same, but it is hard to believe that in Romania, for example, the terminal could be cheaper than €400.
The good part is that many operators will be able to offer the terminal for free with some subscriptions, or will sell it at very low prices with others, so many more people will have access to iPhones.
