Goldman Sachs analysts are predicting that due to the competitive nature of the smartphone market, Apple will eventually be forced to introduce a low-cost version of the iPhone, according to a report from Duowan.com.
If Apple produces a low-cost iPhone, it will cost consumers $249 and comes with 8GB memory on board, the analysts explained.
Goldman Sachs is refuting claims from other analysts that Apple will sell a low-cost iPhone for $99. The $249 price tag will enable Apple to further expand their market whilst allowing the company to maintain a fairly high gross profit margin.
The analysts believe that Apple will never give up its “first-class user interface and functionality” for marketshare. They expect the built cost of the low-cost iPhone will be around $132, resulting in a gross margin of 46.9%. Apple may use a combination of high-end and low-end components to achieve the $132 price point. The display is expected to be around 3.5 inches and will account for the bulk of the built cost, according to the report.
In addition, Goldman Sachs analysts believe that the low-cost iPhone will initially only supports 3G network with LTE support coming in later models. The device is expected to be equipped with the same processor and camera used in the iPad Mini and features a plastic or non-metallic enclosure to keep manufacturing costs down.