The iPhone Mini has been spinning around the Apple rumor mill for some time. After meeting with Apple CFO Peter Oppenheimer, one well-placed analyst sees “several signs” that offering a lower-priced iPhone “makes sense. Morgan Stanley analyst Katy Huberty’s reasoning about the release of the long-rumored, downsized iPhone “mini” or “nano”, says Forbes, is based on the success of the iPad mini in emerging markets such as China and Brazil, where 50 per cent of the sales of that li’l fellow went to new Apple customers.
Chinese phone buyers in particular, she notes, prefer to buy the latest models of phones rather than pay bargain prices for older models – a tactic that Apple is now persuing, flogging its iPhone 4 and iPhone 4S at lower prices than its flagship iPhone 5.
A smaller, less-expensive, new iPhone would fill that bill, and still leave Apple with enough profit potential to make offering it worth their while. “Even at a low 40 per cent gross margin and one-third cannibalization rate,” Huberty says, “we see an iPhone Mini as incremental to revenue and gross profit dollars.” Apple is eyeing the Chinese market hungrily – there’s nothing quite like over 1.3 billion potential customers to make a CFO’s heart go pitter-pat.
One way of tapping that potential is for Apple to stock those retail stores and point-of-sale locations with a device that has been rumored since even before the original iPhone made its debut: the iPhone mini. Offering a lower-cost, up-to-date phone in emerging markets would not only make Huberty look like one smart – and prescient – cookie, but if her profit predictions are correct, it would make Apple’s shareholders happy, a feeling they haven’t experienced since the company’s share-price slide began last September.