Apple to unveil iPhone to boost profits
Apple Inc. hopes a bigger emerging market presence can reverse lost fortunes.
CALIFORNIA - Apple Inc. is expected to introduce a cheaper version of the iPhone on Tuesday, bringing one of the industry's costliest smartphones within reach of the masses in poorer emerging markets.
The world's most valuable technology company, which many expect to unveil an iPhone 5C in several colours alongside the latest high-end iPhone 5S, is trying to beat back rivals like Samsung Electronics Co Ltd and Huawei Technologies Co Ltd in markets like India and China, where it is fast losing ground.
Wall Street approves of the move to offer a more basic version of the device, although some investors warned initially it will dilute margins and potentially tarnish a brand that has been linked to premium users since its 2007 inception.
Now, they hope a bigger emerging-market presence can help reverse a 29 percent fall in the company's share price since it hit a record high of $702.10 a year ago.
Industry observers said Apple has not turned out a category-defining electronic device since late co-founder Steve Jobs made a bet on the iPad in 2010. Speculation revolves around a smartwatch - along the same lines as Samsung's recently introduced Galaxy Gear - or some sort of TV product.
But analysts said neither is likely to generate numbers anywhere in the neighborhood of the iPhone, which supplies half of Apple's revenue and is its highest-margin product.
"Apple needs to demonstrate in the coming months that it has other product lines which can start to make up for slowing growth and falling margins in (the) iPhone and iPad," said Jan Dawson, chief telecoms analyst for Ovum Research.
For the first time, the company will host media in Beijing just nine hours after its Cupertino, California launch, spurring speculation it will announce a distribution agreement with the Chinese carrier.
The world's largest wireless carrier serves more than 740 million users and is perceived as more amenable to carrying the popular smartphone now that profit and subscriber growth are decelerating. Net income grew just 2 percent in the April to June quarter.
And smaller rivals China Unicom and China Telecom - both of which already sell Apple's gadget - are making headway against the market leader.
Separately, Japan's largest carrier, NTT DoCoMo, is expected to begin selling it as soon as this fall, other sources said.
One key question is whether Apple will sell its cheaper iPhone 5C also in more mature markets like Europe or the United States - heightening the risk that it will begin cannibalising sales of the flagship 5S.