Apple's Trump Card To Launch The Successful Budget iPhone

By AllTechAdvisor

What has created the huge surge of sales of the iPhone over the last year? Many people believe that the move to break the four-inch screen barrier was a key component. It allowed Apple’s smartphones to be seen as equals to Android devices in the eyes of many. That same feature is about to swamp the budget smartphone market.

The iPhone 6 and iPhone 6 Plus set sales records, and the iPhone 6S and 6S Plus has seen the largest numbers of users coming from Android to Apple of any iPhone. For existing Apple users, the jump from the four-inched screens of the iPhone 5 and the iPhone 5S gave them more impetus to stay with an iOS device, and no doubt also contributed to the sales.

It’s one advantage that the presumptively titled iPhone 7 will not have when it arrives next year. Indications are the same screen technology and sizes from the iPhone 6S family will be used for the iPhone 7 devices, so the choice will remain as 4.7 inches or 5.5 inches. The ‘sizeable’ sales boost granted to the current generation of handsets will not apply to the iPhone 7. It’s one reason many analysts rely on to argue that we may be experiencing ‘peak iPhone’ during this quarter of sales. Naturally some disagree on that viewpoint.

Luckily for Apple’s sales figures, the arrival of the iPhone 7 will have a knock-on effect across the iPhone portfolio. As the iPhone 5S falls out of the bottom of the bed to make room for the iPhone 7, the iPhone 6 will take its place as the entry-level device.

While many analysts will point to the potential of a modern variant of the iPhone 5C (presumably called the iPhone 6C) and its ability to capture the budget market, Apple will want to preserve the brand values and the idea of luxury that drives the lust for Apple devices. The iPhone 5C was little more than a rebadged iPhone 5 with the metal case replaced by a polycarbonate shell. While it was an undoubted success in terms of sales, it never caught the imagination of the public and was seen as a misfiring product by the press.

I doubt Tim Cook will let that mistake happen again.

By the time September 2016 rolls around, the iPhone 6 will be utilising two-year old technology, it will have a significant economy of scale that should allow bulk buying of parts and the lowering of the bill of materials, allowing it to occupy the lowest of the three pricing tiers in the iPhone range and still deliver a significant profit margin.

Not only will it be the ‘free’ handset thanks to network subsidies, it will be the first ‘free’ Apple handset to ship with the larger screen. The same desire for size that drove top-line iPhone sales in 2014 will be ready to drive the bottom-tier iPhone sales in 2016. Apple played a trump card in 2014 with the release of the larger screen. That trump card is back in its hand and will be ready to play again in 2016 to drive iPhone sales upwards once more.