Worry Over Sales Spurs Talk of Cheaper iPhones
By BRIAN X. CHEN January 14, 2013
By now, most of the world knows what an iPhone is - and they know it typically doesn't come cheap.
That is the problem Apple faces. Analysts say it must decide whether to keep catering to the high end of the phone market, reaping fat profits from relatively fewer sales, or offer something cheaper to compete with lower-cost alternatives like Samsung's phones.
Worries about low-cost competition weighed on Apple's stock on Monday after reports that the company had reduced orders of screens for the iPhone 5, suggesting that demand for the phone could be weaker than expected. The company's shares dropped 3.6 percent for the day to close at $501.75; they have slid 29 percent from their high in September.
The long slump in the stock price has increased the pressure on the company to produce a solid earnings report on Wednesday, when investors will be looking closely to see how strong iPhone sales were.
The iPhone is still a top seller in the American market. But it has a tougher time competing in other markets, where consumers buy phones without a subsidy from a wireless carrier. In countries like Brazil, Germany and Spain, the iPhone 5 can cost $650.
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