Will Apple Go Downmarket With Cheaper, Prepaid-Compatible iPhone?
Such a move would make sense, given the setback Apple has suffered over the past 12 months as Android-based phones took the lead from the iPhone. Apple must compete against an army of smartphone makers using Google's (GOOG) Android operating system, offering a variety of phones in a wide range of price points.
If Apple wants to establish a meaningful presence in emerging markets, offering a phone that can handle prepaid calling plans is a good start. Analysts note that customers in emerging markets tend to favor prepaid phones, as well as inexpensive handsets.
While Deutsche Bank's analyst expects to see a new low-end iPhone model from Apple, an analyst with BMO Capital Markets (BMO) believes Apple's solution will be to trot out its older generation 3GS models, according to a Barron's report. Apple currently sells a 3GS with 8 GB for $49 with a two-year AT&T contract.