updated 12:35 pm EDT, Mon September 26, 2011
4S seen as selling for under $350 contract-free
Apple will indeed sell two new iPhones this year, argues Deutsche Bank analyst Chris Whitmore. The first, the iPhone 5, is predicted to switch to a unibody aluminum design, rejecting the glass back used for the iPhone 4. The 4's glass will often crack if the phone falls and hits a hard surface. Whitmore also suggests that the phone will have a better camera and a slightly larger screen, as has been rumored.
The analyst has more interest however in the so-called iPhone 4S. He suggests that the device will cost less than $150 to make, and be sold for somewhere between $300 and $350 without a contract. This would allow Apple to push deeper into midrange smartphones, Whitmore proposes, including a market of about 1 billion prepaid customers.
The 4S is effectively seen as an 8GB iPod touch with cellular technology. With a $300 pricetag that would allow Apple to reap a profit margin of about 50 percent, Whitmore estimates. The actual 8GB Touch sells for $229, and generates a margin of approximately 38 percent.
Whatever the case, any new iPhones are widely expected to be announced on October 4th. If Apple does reveal prepaid iPhone options, it could conceivably extend the number of iPhone carriers beyond the rumored additions of Sprint, KDDI and China Telecom. In the US that might mean Virgin Mobile, particularly since it already operates on the Sprint network.