Menu
Apple's low-cost iPhone could outsell iPhone 5S in 2014, says analyst

Apple's low-cost iPhone could outsell iPhone 5S in 2014, says analyst

Will over half of Apple's total iPhone sales will come from the rumoured 'iPhone Lite'?

Apple's rumoured low-cost iPhone could outsell the iPhone 5S in 2014, an analyst has predicted.

According to a new research note from UBS analyst Steve Milunovich, picked up by Barron's this week, the cheaper iPhone, which he calls the "iPhone M" but is more commonly referred to as the "iPhone Lite" or "iPhone 5C," will launch in September and account for 53 per cent of Apple's total iPhone unit sales in its first full year on the market.

Milunovich believes that the low-cost iPhone will reach sales of 92 million units in fiscal year 2014, outselling the next-generation iPhone, dubbed iPhone 5S, that is expected to release alongside the cheaper iPhone.

However, Milunovich warns that the strong sales of the cheaper iPhone could mean Apple's margins take a knock. "In our model, the iPhone M is dilutive not only to gross margin but to gross profit dollars," he said. "The impact of the M depends on assumptions. We estimate the iPhone 4/4S, which the M would replace, currently have a gross margin of 55 per cent because of the low cost of older components. We also assume the gross margin of the M will be near 32 per cent."

"Because the M has such a lower gross margin than the 4/4S, the M reduces earnings in our model," he concludes, noting that the purpose of launching a cheaper iPhone despite the risk to profits would be to expand its market reach at the expense of short-term profit.

Rumours about a low-cost iPhone have been hotting up in recent months, as several leaked parts that allegedly belong to the cheaper iPhone have emerged online.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags iPadUBSsmartphonestabletsAppleiPhonehardware systemsconsumer electronics

Featured

Slideshows

Meet the leading customer-centric Microsoft channel partners

Meet the leading customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the leading customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments