iPhone

We’ve been hearing rumors about Apple releasing a cheaper iPhone for a while, but J.P. Morgan analyst Mark Moskowitz this week has made a compelling case that a lower-cost iPhone will likely be a mid-range device that sells in the $350 range without subsidies and not in the $150 bargain-bin range with devices like the Nokia Lumia 521. Per Barron’s, Moskowitz writes that the success Apple has enjoyed with the iPad mini so far has shown the company that it can significantly expand its reach if it’s “willing to sacrifice near-term gross margins” in exchange for long-term dominance of the market. Although there aren’t too many well-known smartphones selling in the $350 range, Moskowitz notes that “Apple usually creates new demand when it steps into a price band” since “the $300-400 price range for tablets did not have much demand… before the launch of the iPad mini.”

According to recent estimates, Apple’s share of the smartphone market took a big hit in the first quarter this year. Market research firm Strategy Analytics estimates that the 37.4 million iPhones Apple sold last quarter were good for 17.9% of the global smartphone market, down from the 22.8% of the market Apple controlled in the same quarter last year. With no savior expected until September at the earliest — CEO Tim Cook recently said Apple is working on new products that will launch beginning this fall — Apple stands to continue losing market share until the iPhone 5S, and perhaps a new low-end iPhone as well, launch later this year. More →

Apple’s three available iPhone models combined to handily dominate rival smartphones on the three top wireless carriers in the United States last quarter. Verizon, AT&T and Sprint have now each reported their first-quarter financial results and in doing so, they have also released smartphone sales and activations figures. Enders Analysis analyst Benedict Evans charted the combined data and found that Apple’s iPhone line continued its reign in the first quarter despite the soured Apple sentiment. More →

Another day, another key Apple supplier posting disappointing earnings. Per Reuters, iPhone and iPad display supplier LG Display has posted a 74% quarterly drop in earnings, thus adding to worries that “demand for iPhone and iPad screens weakened amid concerns that Apple was losing its luster in the mobile device market.” Apple devices account for roughly 30% of LG Display’s overall revenues, so it’s likely that at least some of LG Display’s drop in earnings can be attributed to substandard iPhone sales. iPhone audio chip supplier Cirrus Logic and iPhone manufacturer Foxconn both recently also posted disappointing earnings that were reportedly at least partially due to lackluster iPhone sales.