In yesterdays article I touched upon the fact Apple is in development of a cheaper iPhone and that the share of the global market. With a cheaper iPhone it helps make Apple make deeper inroads in markets such as China and India.
It seems Apple has done something similar to this before. In ?04, the sales of original $299-plus iPod were still rising; the company introduced the $249 iPod Mini. Then in ?05, the Mini was discontinued for a cheaper iPod Nano. Apple is selling an iPhone 3GS for $49 but it would require you to sign a 2 year contract.
With Apple able to get discounts from suppliers due to the massive amount of iPhones being sold and by Apple signing long term contracts this will enable them to make the moves needed to make a cheaper iPhone to penetrate markets globally that may not be able to afford an iPhone with a 2 year agreement. The company has actually executed some long term agreement that total in the area of $3.9 billion in the past few months.
This will now also affect what is seen to be Apple?s biggest competition to date in the mobile phone market, Google. The Android was able to penetrate the market not only by making more affordable phones with a decent operating system but has also had the market covered in versatility as Android phones are available on multiple carriers. Apple understands this and has countered by offering the iPhone on the Verizon Wireless platform. If the iPhone can be cheaper and still keep the allure I think Apple might have something and they can finally penetrate the markets like China and India.