Dhaka, Bangladesh
Budget iPhone 5 'to launch soon'

Budget iPhone 5 'to launch soon'

The budget version of Apple's latest iPhone will cost roughly $330 (£220), priced in order to appeal to young, middle class consumers in countries like China and India. The claims about the price and the imminent release were made on the Japanese website Macotakara, following on from earlier reports about Apple plans for a cheaper phone. In January it was reported that the planned new phone will resemble the iPhone 5 from the front but Apple will replace that handset's aluminium body with a cheaper plastic casing. Jeremy Horwitz, of iLounge, claimed that "reliable sources" told him in detail what the new device will look like. He said the new device will have a "retina" display and feature Apple's new Lightning connector for charging and syncing. He wrote: "One of our sources claims that Apple's iPhone prices remain too high for most mainland Chinese customers - the iPhone 5 hardware alone starts at $849 there, versus the iPhone 4 at $500, in a country where the average annual salary is around $3,000 per person). "The source has said that mainland Chinese iPhone 5 sales are already tapering off as a result of the pricing, which is higher than in Hong Kong. A budget iPhone model would help sales in populous but underdeveloped countries to grow." Horwitz also says that Apple will release an upgraded iPhone 5S, with an improved rear camera, perhaps in July. He says his sources claim a fifth generation iPad and a new iPad mini - with 'retina' display - will be released in October. Reports elsewhere suggested that Apple is preparing to add a new iPad model, with 128GB of storage, some time this year. In January, Apple announced its record profits in its quarterly results but saw share prices fall amid analysts' disappointment over iPhone sales. Tim Cook, Apple's chief executive, said iPhone 5 supply had been "very constrained for much of the quarter". The company announced a record 47.8 million iPhones sold but Wall Street expected more. A cheaper version of the device is seen as essential by some analysts, particularly if Apple is to make inroads into the growing Chinese market. In response to the results, Trip Chowdhry, an analyst with Global Equities Research, said: "Apple will need to innovate. For Apple to renew growth they need to come up with new devices." It appears that Apple is already thinking along the same lines. The earnings report reveals a 32 per cent increase in Apple's research and development budget in the final quarter of last year. Apple increased its spending on R&D to $1 billion, an increase of $252 million, compared with the same quarter in the previous year. Apple's filing said: "The Company continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company's core business strategy. "As such, the Company expects to make further investments in R&D to remain competitive."

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