An iPhone 4S
San Francisco, Sept. 9: The handset market is so brutally competitive that Apple, the most successful smartphone maker, is preparing to step up its game this week by offering two new iPhones instead of one.
At an event tomorrow at its Cupertino, California, headquarters, the company is set to unveil for customers worldwide a new iPhone with a faster processor, along with another model that will be sold at a lower cost.
The company’s profit growth has slowed in response to a saturated handset market in America and parts of Europe. Many people already own a smartphone and are not upgrading to new devices as often as before.
A low-cost smartphone could allow Apple to expand into overseas markets — especially China, where the iPhone has been highly desired among many consumers but is just out of reach because of its price.
“A cheaper model will open up the market significantly for Apple,” said Chetan Sharma, an independent telecom analyst who consults for phone carriers.
Apple declined to comment on the new products. But analysts expect the higher-priced model to be an improvement over the current iPhone, including a faster processor and better camera flash, as well as a fingerprint sensor for security.
The second iPhone is expected to be a cheaper version of the soon-to-be-outdated iPhone 5, coming in a variety of colours, with a plastic case instead of aluminum. Analysts expect the full price of the low-cost iPhone to be $300 to $400, positioning it as a mid-tier product.
Apple has been enormously successful, with the iPhone driving most of its revenue. In the second quarter, the company took 53 per cent of the profit in the global smartphone market, with Samsung Electronics, which uses Google Android software to run its smartphones, taking the rest, according to a survey by Canaccord Genuity, an investment bank.
But both Apple and Samsung face a common enemy: the tide of manufacturers that produce dirt-cheap Android phones. While they make all the profits, Apple and Samsung have seen their combined share of the worldwide smartphone market drop to 43 per cent in the second quarter from 49 per cent a year earlier. The makers of cheaper phones — including Huawei, Yulong and ZTE of China, and Micromax and Karbonn of India — are raking in sales in emerging markets where high-end smartphones are not popular.
“We’ve had several indications from the handset market that vendors are in real trouble,” said Tero Kuittinen, an analyst for Alekstra, a mobile diagnostics firm. “The biggest threat to all the companies seems to be the low-end Androids.”
In terms of sales, smartphones surpassed traditional flip phones this year. There are a few markets remaining where traditional cellphones are still outselling the smartphone, including India, Brazil and Russia.