Apple dismisses the idea of a cheap phone as the market share of iOS falls

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Thumbnail image for cellhire-logo29.jpgWith rumours that the Apple iWatch is nearing a potential release date, it can now be assumed that the controversial plan to manufacture a cheap iPhone has been scrapped by Apple.

During a speech on Tuesday, Apple CEO, Tim Cook said that:
“There are other companies that do that, that’s not who we are. Our North Star is great products.”

Although the news of a cheaper handset was welcomed by some consumers, especially those that cannot afford the latest iPhones, it is now understood that Apple feel a cheaper phone may inadvertently lead to a cheaper brand.

They have however come up with a compromise; by lowering the price of their current phones.

Only last December Apple lowered the price of the iPhone 4 after the release of the iPhone 5, resulting in a level of demand that far outstripped supply. Cook himself even stated how surprised the company were at the resulting demand. The smartphone market currently sells around 700 million units a year, a figure that is set to double within three years.

The iPhone holds a 9.2% share in all mobile phones sold worldwide.

Despite Apple declaring cheaper phones for all, Gartner’s quarterly Market Share Analysis: Mobile Phones, Worldwide report shows that Samsung’s fourth quarter 2012 sales totalled 65.5 million handsets; compared to Apple’s 43.5 million. The increase of sales in Android devices meant that in the final quarter of 2012, iOS market share fell from 23.6% in 2011 to 20.9% in 2012.

But what could have caused this?

Gartner state that Samsung’s huge resources were key to their 2012 success:
“Samsung’s resources and ability to build a broad market reach is an advantage that no other competitor can easily match. However, the competition will intensify in 2013 as players such as Sony and Nokia improve.”

Although Samsung are able to celebrate a great 2012, since the death of Steve Jobs Apple has struggled to maintain its sleek image with recurring human rights issues in China, alongside the Apple Maps troubles which blighted much of 2012 – and ultimately forcing a personal letter of explanation to come from Cook himself.
What does this mean for consumers?

With so much competition now in the market from the likes of Nokia, Samsung and Blackberry, there has never been such a range of choice available from leading brands.
Smartphones can be expensive to run, and there are very few ways in which consumers can save money. While you can of course rent international SIM cards from companies like Cellhire when you go on holiday, there are relatively few ways to save money on the handsets themselves.
Increased competition among the top four brands can only benefit the wallets of consumers; with quality brands such as Apple now focusing on lowering their prices there could be some very interesting fluctuations in the market as 2013 unfolds.

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