Suggest a cheap iPhone? Strategically interesting but unprofitable according to these figures

Today, the smartphone market is dominated by Android, which is credited with about 85% market share. The clear advantage is partly due to the large number of manufacturers that offer smartphones for some aggressive pricing.

Faced with this armada, the question may arise: the firm at the apple should it enter this fray and offer a cheaper iPhone to gain market share and, consequently, increase its sales business and profits?

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Benedicte Evans, strategy consultant, who shall keep a blog in which she analyzes the challenges for consumer technology companies, provides an analysis and response that does not really go in this direction:

First, we must define what is meant by "cheap iPhone" because Apple still offers the iPhone 4s in 8GB and costs € 406, plus 5c iPhone 8GB priced at 559 €.

As indicated by the author of this study, the first price, up to $ 200, should be avoided because they are often insufficient smartphones with specifications (CPU, memory, display, etc. quality) to get experience pleasant and comfortable user. By cons, from $ 250/300, a mid-range segment is etched with machines capable of very good performance affordable to a broad public rates.

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What would happen if Apple offered an iPhone in this price range?

This model would certainly be a success from a business point of view, but not necessarily in terms of profits.

Thus, a model would not $ 250 according to the analysis of the benefits that an increase of around 5%. Selling the iPhone $ 300, about 7% gain expected. Not to mention a probable cannibalization of high-end models such as the iPhone 5s.

Certainly, one could argue that it's always worth taking. But the game is worth it, at least for Apple? Uncertain in the current situation of the company, is already very profitable. One element could still advocate such a change in the mix: a model at this price would take market share from Android and thus strengthen the iOS ecosystem.

The renewal of the iPhone family, including the arrival of two screen diagonal 4.7 and 5.5 inches for the iPhone 6, and repositioning of the current range could extend that possibility, not sure Apple nevertheless want to have at the moment?

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