Apple Inc. (NASDAQ:AAPL) may be closer to launching a low end iPhone than most seem to think according to a new report from Morgan Stanley (NYSE:MS). The report, which was authored by Katy Hubely, sources feedback from carriers and other sources in Asian markets.
According to the Morgan Stanley (NYSE:MS) report which was published earlier today,”Multiple new iPhone SKU’s begin production in Jun/Jul, on track with the Sept launch we model.” SKU is a Stock Keeping Unit, a signifier of a unique product. If Apple is in fact working on Multiple iPhone SKU’s, it could mean a cheap iPhone is just around the corner.
Apple Inc. (NASDAQ:AAPL) Cheap iPhone No Guarantee
Multiple SKU’s doesn’t guarantee that Apple Inc. (NASDAQ:AAPL) is about to introduce a truly cheaper iPhone.
Investors should remember that Apple Inc. (NASDAQ:AAPL) already produces multiple iPhone’s, including some that the company already regards as cheap models. The iPhone 4 and the iPhone 4s both receive minor changes every year, and Apple Inc. (NASDAQ:AAPL) has to still build the phones. This rumor may come to the exact same end as others surrounding the cheap iPhone.
Theories about a new model are interesting. Because of recent statements that Tim Cook has made, and recent changes Apple Inc. (NASDAQ:AAPL) has made to the way it does business, when Cook says on a conference call that people will be excited about an upcoming product, he may be talking to investors. Nothing would please investors more than a cheap iPhone offering to take the Chinese market from Android clutches.
Low end smart phones, as Katy Hubley points out in this report, are the fastest growing segment of the Chinese market. Apple Inc. (NASDAQ:AAPL) is certainly missing out on that revenue.
The problem for lower income Apple Inc. (NASDAQ:AAPL) fans in the United States is that the company may not decide to sell the cheap iPhone in the US market. Apple Inc. (NASDAQ:AAPL) is wary of cannibalization since its iPad Mini began to steal sales from the higher margin large iPad’s. A cheap iPhone in the United States, unsupported by carrier subsidies, could mean margin compression for the firm.