Attractions In New Orleans - How Will a Cheaper iPhone 5C Affect Pricing For Older iPhones?

Source       - http://news.cnet.com/
By              - Marguerite Reardon
Category    - Attractions In New Orleans
Posted By  - Homewood Suites New Orleans

Attractions In New Orleans

As rumors heat up that Apple will likely introduce not one, but two new iPhones in September, consumers wonder what it means for the company's traditional product discounting conventions.

While Apple has generally kept tight-lipped about the launch of its new iPhones, there are a few things that most Apple fans have been able to count on each year. One is that the company will introduce one new smartphone a year. And the second is that last year's model will sell at a $100 discount and its 2-year-old version will be $200 less expensive than the new one -- or it will be free with a two-year carrier contract. 

But with the rumor that Apple will be introducing a high-end flagship iPhone, called the iPhone 5S, along with a lower-cost option called the iPhone 5C, consumers aren't sure what to expect. Apple as usual has been mum. In this edition of Ask Maggie, I offer some advice to a wireless consumer wondering if he should buy the iPhone 4S now or wait. I also answer another reader's question about buying insurance for her son's new iPhone.

Will the iPhone 5C replace the iPhone 4S?

Dear Maggie,

My wife is wanting to get an iPhone 4s, and up until recently we were going to wait until the announcement for the next iPhone. In previous announcements, the latest device retails at $199, the prior year model (in this case would be iPhone 5) would be priced at $99, and the two-year prior would retail at $0. Of course, I'm referring to the two-year contract prices.

My wife wants the iPhone 4S, mainly because we don't want to replace all of our accessories with the new connector that is on the iPhone 5 and will likely be on the new devices. Recently, there has been a rumor that a low-cost iPhone, the iPhone 5C, will be introduced along with a new high-end iPhone. I've heard that the iPhone 5C will replace the iPhone 4S, and that one would not be able to buy a 4S upon release of the new devices. Does this rumor hold any water? Should we eat the $99 that it costs right now to get the device that she wants?
Thanks,

Alex

Dear Alex,
As with any iPhone rumor, I have to be clear that at this point, there is far more speculation out there than factual information about what Apple will or will not announce in September.

That said, when the rumors reach their current intensity, it is more likely than not that at least some of the things you've heard are true. For instance, it's pretty clear at this point that Apple will hold an event in California on September 10. And it's also pretty clear that the company is preparing to launch not one but two new devices in September. One is a high-end smartphone, using top-of-the-line components dubbed the iPhone 5S. And the other is a less-expensive model you mentioned in your question called the iPhone 5C. 

Beyond the actual existence of this "second" device, it's hard to say exactly how the new phone will be sold and what Apple will do about its older models. I have speculated in the past that the low-cost model of the new iPhone may not be available in the US market. Instead, I predicted that the device would be available only to consumers in developing markets, such as China, much like other phone manufacturers have done with other low-cost devices. A few of my CNET colleagues and analysts, who follow Apple, have made similar predictions about this possible strategy.

But others, such as CNET's own Apple expert Josh Lowensohn, think limiting the iPhone 5C to developing markets veers too far from Apple's traditional product playbook. 

"Apple doesn't do specific devices for specific regions," Josh told me. "They do something that's mass market, and as mass market as possible. A cheaper, plastic, colorful iPhone addresses a ton of consumers here."