From the initial Apple 4 to Apple 5, as well as the upcoming iPhone 5S and cheap apple, it seems that it is necessary to make a decisive decision on the road of market share competition with other brands. According to the latest data, analysts say that the sales volume of low-cost iPhone will surpass that of iPhone 5S in 2014.
Milunovich believes that sales of low-cost iPhones will reach 92 million in fiscal 2014, which will surpass the new iPhone released in the same period, the iPhone 5S.
However, milunovic warned that strong sales of cheap iPhones could hurt Apple's profits. He pointed out: 'in our model, the gross margin of the iPhone m and the dollar will both fall. Of course, it's all based on assumptions. We expect the iPhone m to replace the iPhone 4 / 4S, which now has a gross margin of 55% due to the relatively low cost of older components. At the same time, we also assume that the iPhone m gross margin will be close to 32%. '
Milunovic concluded: 'because the gross profit margin of iPhone m is lower than that of iPhone 4 / 4S, in our model, the profit of iPhone m will be reduced. "But he also pointed out that the reason why Apple is risking lower profits to launch a cheap iPhone is that it wants to expand its market coverage at the expense of short-term profits.