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Lower-cost prepaid iPhone shipping this year, source claims

updated 10:55 am EDT, Mon July 18, 2011

Could fill crucial gap in iPhone sales

Long proposed by analysts, a cheaper, prepaid version of the iPhone will be available later this year, claims an "incredibly solid source" for BGR. The device will allegedly cost no more than $350 without a contract. It's suggested however that the model could be the two-year-old iPhone 3GS, which is already $49 tied to a two-year AT&T contract.

In any case the same source claims that a flagship iPhone -- whether an iPhone 5 or just a "4S" -- will be launching or "at least announced by the end of Summer, late August-ish." The person speculates that the external design of the hardware will likely remain the same, since third-party cases based on leaks have yet to emerge; at the same time, Apple has reportedly been taking a tougher approach to keeping specifications secret. The iPhone 4 will allegedly stay on the market, creating low-, mid- and high-end iPhone tiers.

The lack of a prepaid option has often been seen as a major gap in Apple's iPhone strategy. Aside from the many Americans being unwilling to buy an expensive smartphone on contract, prepaid phones could satisfy international audiences, which often try to avoid contracts altogether. Lower prices could also increase appeal in poorer nations like China and India.



By Electronista Staff
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Comments

  1. Paul Huang

    Mac Enthusiast

    Joined: Sep 1999

    +4

    Leave the 3Gs production line intact

    Lower the price tag and, voilĂ , you have the 'low cost' iPhone.

  1. lamewing

    Dedicated MacNNer

    Joined: Aug 2004

    +3

    Prepaid Go Phones

    @Paul Huang

    Agreed. Just keep making the 3GS and allow the use of Go Phone sim cards. Poof! Cheap Phone and prepaid all in one step. My contract ends and I wouldn't mind having my iPhone 3GS as a Go Phone back up to my Samsung Focus Windows Phone.

  1. Salsa

    Forum Regular

    Joined: Oct 2003

    0

    iSupply

    I would love to see an updated iSupply estimate of the cost of the parts of the iPhone 3Gs. Is it really that much cheaper to build than the newest model? I suspect not, but I don't know. My guess this is a case of Apple offering less capable phone so it can charge the price sensitive buyers less money while not cannibalizing their high end much.

  1. facebook_Philippe

    Via Facebook

    Joined: Jul 2011

    +2

    Sounds like a good strategy but

    The three devices needs to be multi-network compliant so that's it available everywhere and cheaper to produce and bump up the memory on the 3GS to 512 Meg so that they can keep updating the software up to system 6. If they price those properly they should be able to reach a 40% marketshare for the OS.

  1. Jeronimo2000

    Forum Regular

    Joined: Aug 2001

    +2

    Let me see...

    ... the "low-cost iPhone" rumor is how old again? Must be here somewhere... ah, there we have it. It's as long as the iPhone itself. And "yawn" again. :)

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +1

    New phone model

    There is no reason a $350 device can't be better than the old 3gs - and don't forget Apple happens to be good at marketing. 3gs says old model. It's better to do a new model designed to do everything you can for this $350 device.

    The U.S. isn't a big prepaid market - we are dominated by the contract market. This will be especially good in Europe and Asia.

    But in any event - FINALLY. I'm happy about this move.

    Usually I have to defend Android - because of all the uninformed, ridiculous comments that fanboys toss out, but this is a competitive move by apple that should really hit Android in the nuts.

    It isn't fanboyism - its just the right move by Apple - and its going to cost Android big time - because up to now they didn't have competition from Apple in prepaid.

    Android isn't up to par with iPhone yet - so, losing that protected market, will hurt.

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