Wed, Aug 24, 2011 - Page 11 News List

Suppliers building cheaper, 8GB iPhone 4: sources

Reuters, TAIPEI and HONG KONG

Asian suppliers to Apple Inc have begun manufacturing a lower-priced version of its hot-selling iPhone 4 with a smaller 8 gigabyte (GB) flash drive, according to two people with knowledge of the matter.

The flash drive for the 8GB iPhone 4 is being manufactured by a South Korean company, one of the people said yesterday, declining to name the company. Apple currently sources its flash drives from Japan’s Toshiba Corp and South Korea’s Samsung Electronics Co.

The sources declined to be identified because the information has not been made public. Apple and Samsung declined to comment.

The existing iPhone 4 was launched in June last year with 16GB and 32GB versions, with a white version added to the lineup in April. The 8GB version is expected to launch within weeks, the sources said.

Some analysts said the cheaper 8GB iPhone 4 could help Apple boost sales in emerging markets.

“Apple may want to push into the emerging market segment where customers want to switch to low to mid-end smartphones from high-end feature phones, which usually cost US$150 to US$200, but I think for an 8GB iPhone 4, the price is hard to go below US$200, so Apple will still need a completely new phone with low specifications for the emerging markets,” Yuanta Securities Co (元大證券) analyst Bonnie Chang (張文慧) said.

In addition to the launch of the smaller iPhone 4, Apple is targeting an end-of-next-month launch for the next-generation iPhone 5, one source said, confirming earlier reports on Apple-follower blogs and industry Web sites.

The new iPhone, which some call the iPhone 4S because of its largely identical appearance to the existing iPhone 4, will have a bigger touch screen, better antenna and an 8-megapixel camera, one of the people said.

The iPhone 5’s two manufacturers have been told to prepare production capacity for up to 45 million units, the source said. The phone will be made by Hon Hai Precision Industry Co (鴻海) and Pegatron Corp (和碩), the person added.

Apple sold 20.34 million iPhones in the second quarter versus an expected 17 million to 18 million and it is increasingly looking to Asia to boost future earnings.

The company’s chief operating officer Tim Cook said last month the company is particularly optimistic about the Greater China market.

“I firmly believe that we are just scratching the surface right now,” Cook said about China. “I think there is an incredible opportunity for China there.”

The Asia-Pacific region — which accounts for about one-fifth of its total revenue — and Greater China in particular helped Apple’s revenues surge 82 percent to US$28.6 billion in the April-to-June period.

Overall, revenues in the Asia-Pacific region more than tripled to US$6.3 billion in the quarter.

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