Just yesterday, it was reported that production of the mid-tier iPhone has begun. Moreover, it was noted that the next-generation iPhone 5S would hit the assembly chain by later this month, ahead of a September or October release. The insider scoop came from Jeferries analyst Peter Misek, someone that doesn’t have a particularly strong track record at speculating on Apple product plans.
Nevertheless, it appears that Misek was correct about at least one of those forthcoming devices this time around. The analyst’s claims about the iPhone 5S were corroborated today by John Paczkowski of the credible AllThingsD, who cited multiple sources familiar with the company’s plans. And while he did not confirm the existence of a lower-cost iPhone, Paczkowski did explain why it could make sense.
The iPod nano, the iPad mini — when those devices launched, they were dismissed as too expensive to attract the budget-conscious consumers. But they both proved wildly popular, establishing a new “mid-end” price band between the market’s high end and low end. The key to their success: Both were aspirational products that drew typically budget-conscious consumers into a higher price range.
Multiple sources have speculated that Apple could sell its mid-tier iPhone for between $300 – $400 without subsidies. While this price range would prove to be too expensive for the handset to make a splash in the entry-level market, it could emulate the success of products like the iPod nano and iPad mini. And as long as iPhone 5S sales are not overly cannibalized by the introduction of a less expensive model, that would be a winning situation for Apple.