Apple faces tough choice on cheaper iPhone
Which may be the stumbling block for Apple. In the past, company executives, including former CEO Steve Jobs and current chief Tim Cook, have said they wouldn't sell devices at certain price points because they couldn't while maintaining product standards.
"Apple wants to remain a premium brand, with solidly-built devices and all the appropriate support services," said Gottheil. The company may eventually produce a less-expensive smartphone, but it would still be at what the analyst called "the higher end of the price band."
"That's necessary to maintain their margins and their high level of service, as well as their brand integrity," Gottheil said.
The aim would be to make the price difference between an iPhone and a low-cost Android smartphone "not so huge that it becomes a painful decision for consumers," he continued. "They'd like to narrow that gap."
Both experts pointed to the iPad Mini, the scaled-down tablet priced $170 under that of the full-sized iPad, as an example of how Apple would likely approach a cheaper iPhone.
But like the iPad Mini, whose sales some suspect have been at the expense of the iPad, there's potential cannibalization if Apple ships a lower-priced iPhone.
"Here's the trade-off on cannibalization of your installed base," said Gold. "If you don't cannibalization your own sales, someone else will."
Apple CEO Tim Cook has used that same logic to defend speculation that the iPad's success has eaten into sales of its Mac notebooks.
"If you price phones effectively, it expands your market, it doesn't contract it," Gold concluded.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is firstname.lastname@example.org.
- Timeline: How Apple's iOS gained enterprise cred
- Apple and IBM: A winning combo for IT
- IBM and Apple ties go way back
- Apple quickly counters China claim of iPhone spying
- China calls the iPhone and iOS 7 threats to national security
- Apple's CarPlay to dominate infotainment systems, will be in 24M cars by 2019
- Dev interest in OS X Yosemite is 4X what it was for Mavericks in '13
- Apple yanks Google Maps from iCloud's 'Find My iPhone'
- Gartner scales back Windows forecast
- Wal-Mart slashes iPhone 5S and 5C prices by as much as 71% off list
Read more about Smartphones in Computerworld's Smartphones Topic Center.
- Tips for Driving User Adoption in New Technology Deployment Read this checklist on tips for driving user adoption to see where you stand.
- 2014 Gartner Magic Quadrant Report For the 7th year in a row, Riverbed is in the "Leaders" Quadrant of the 2014 Magic Quadrant for WAN Optimization Controllers. In...
- Improving Business Value of WAN Optimization Want to achieve faster ROI with WAN optimization? Read the latest IDC report and discover how you can cut IT costs without compromising...
- Four Little-Known Ways WAN Optimization Can Benefit Your Organization Read this white paper to learn how far WAN optimization has come, and how to make this most of your investments by using...
- Top 4 Digital Signage Fails Join RMG Networks for a look at four of the most common reasons digital signage fails in corporate businesses. Learn about strategies to...
- It's not too late...Get Your Mobile Questions Answered Live! How can IT provide seamless and secure mobile communications and collaboration for all? Join this live Webcast as IDG asks an expert panel... All Smartphones White Papers | Webcasts
Our new weekly Consumerization of IT newsletter covers a wide range of trends including BYOD, smartphones, tablets, MDM, cloud, social and what it all means for IT. Subscribe now and stay up to date!