Apple's iPhone Mini Can Stop Samsung, Says Analyst
Samsung is poised to extend its lead over Apple (NASDAQ: AAPL) in 2013.
Neil Mawston, the executive director at Strategy Analytics, told Reuters that his firm expects Samsung to "slightly extend its lead over Apple this year because of its larger multitier product portfolio."
"Samsung plays in more segments and this should enable it to capture more volume than Apple (assuming Apple does not launch an iPhone Mini this year)," he added.
Mawston does not believe that Apple will launch the illusive iPhone Mini this year. This is primarily due to sales of the iPhone 5, which have been high enough to sustain Apple until the iPhone 6 or iPhone 5S is released.
Even without a smaller iPhone on the 2013 schedule, Strategy Analytics believes that Apple will raise its global market share from 20 to 21 percent. During the holidays, Apple temporarily became the number-one smartphone manufacturer in America when it obtained 53 percent of the domestic market.
Strategy Analytics also estimates that global smartphone shipments will rise by 27 percent this year, pushing the total to 875 million smartphones.
While Apple has been known to build smaller and sleeker products without lowering the price (as evidenced by the first few iterations of the MacBook Air), most analysts believe that the iPhone Mini will be a cheaper smartphone.
"We think Apple will have to launch an iPhone Mini at some point over the next three years to address the hundreds of millions of prepaid users worldwide that cannot afford the current iPhone," Mawston told Reuters. "The iPhone 5 is growing fast and profitably right now, so there is little incentive for Apple to launch an iPhone Mini this year."
Instead, Apple will save the iPhone Mini for 2014 or a later date when the company is "forced to discover fresh growth streams," Mawston added.
Apple's leading "Mini" device, the iPad Mini, could provide some clues to the company's roadmap. In pricing the iPad Mini, Apple could have charged $249 to ensure it remained competitive with Google's (NASDAQ: GOOG) Nexus 7 and Amazon's (NASDAQ: AMZN) Kindle Fire. Instead, Apple decided to charge $329 to maintain the device's premium status without diminishing the value of the iPad 2 (which starts at $399) and the iPad 4 (which starts at $499).
That strategy paid off. Apple shipped and sold millions of iPad Mini units in 2012.
If Apple is to employ a similar strategy with the iPhone Mini, it should be 30 percent cheaper than the full-size iPhone (the iPad Mini's $329 MSRP is roughly 34 percent cheaper than the iPad 4). Thus, the iPhone Mini should retail for $139 with a contract or $450 without.
This would be an appealing price to American consumers who are persuaded by the device's smaller design. This may not, however, be enough to reach consumers with lower incomes. With a 30 percent price difference, the iPhone Mini would still be one very expensive device.
Apple may not have to worry about that, however. The iPad is one of the most expensive tablets available, especially now that Google and Amazon have entered the market. Even so, it has become the number-one tablet in China.
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