By Lorraine Luk
Come September, there will likely be two new iPhone models battling for attention: the latest version of the high-end smartphone, plus Apple Inc.'sAAPL -1.31% new offering for the low-cost phone market. But cheap is relative: the price of that new low-cost iPhone could fall well within the middle range, analysts say.
A customer holds up an iPhone 5, left, and iPhone 4S in Brussels in this Sept. 28, 2012 file photo.
 
Reuters
With competition nipping at its heels, Apple has been forced to break with tradition, asking assembler Hon Hai Precision Industry Co.2317.TW +0.88% to ship both a low-end and high-end iPhone. Catering to a wider market has worked well for Apple’s staunch rival Samsung Electronics Co.005930.SE -1.02%, which has moved to tapfast-growing emerging markets such as China and India. Samsung has introduced a bunch of low-end smartphones with price tags below US$100, helping to offset slowing sales in developed markets. Other major Chinese smartphone brands including Xiaomi and Coolpad have also succeeded in gaining market share in China with sub-US$100 phones.
It’s unlikely that Apple will be willing to play in the same price range. For one, an older version of its smartphone – the iPhone 4 – is already powering sales in price-conscious markets like India.
“I think the less-expensive iPhone will likely have a mid-end price tag. Don’t expect it to be as cheap as those white-box smartphones in China,” said Hun Nan Securities analyst Henry Miao. “Apple’s products always have price premium over other competing devices. For example, the iPad mini starts at US$329 while some Android tablets are priced below US$100.”
The contract-free 16-gigabyte iPhone 5 model sells for US$649 on Apple’s U.S. online store. The 64-gigabyte version is priced at US$849.
Apple’s Beijing-based spokeswoman Carolyn Wu declined to comment.
Samsung and Sony Corp.6758.TO +0.52% are set to unveil new smartphones, and the software behind the iPhone could be a key differentiator. The new iPhones will look similar to the iPhone 5, according to officials at suppliers working on the devices.
Shares of Apple and Hon Hai outperformed the broad markets after The Wall Street Journal reported the shipping plans. Apple was up 1.1% at US$507.74.
Hon Hai ended 0.9% higher at 80.10 New Taiwan dollars (US$2.67) Tuesday, while the benchmark Taiex index closed down 0.9%.