Talking tech since 2003

Apple already has low-cost iPhone options in the iPhone 4 and 4S, but if The Wall Street Journal’s sources are correct, the company might also be working on a less expensive model of its popular smartphone to release later this year.

The information comes from “people briefed on the matter,” who say that Apple is considering cheaper build materials like polycarbonate plastic (seen in the now-discontinued white MacBook) and recycled parts from other iPhone models.

This shift in philosophy would be an interesting one for Apple, as the company has always prided itself on the premium build quality of its devices and has catered more to those willing to pay top dollar, conceding the budget market to Android device makers. Since Tim Cook took over for late CEO Steve Jobs, however, the company has pushed into low price, lower-margin markets like the small tablet space with its iPad mini. It wouldn’t be inconceivable for Apple to jump into the budget smartphone waters with a product, but looking at the on-contract prices for the iPhone 4 (free) and the iPhone 4S ($99), it’s not a move that seems totally necessary.

One additional problem that Apple would have to address with the introduction of a newer, cheaper iPhone is its production line. Apple has been able to offer the iPhone 4 and 4S at discounted prices because it already had the manufacturing processes lined up for those devices. According to the WSJ’s sources, Apple walked back similar plans in the past because it was afraid adding another iPhone would “complicate its manufacturing processes.”

Where a cheaper iPhone would leave Apple’s current strategy of pricing down past generations is anybody’s guess. The company could view these devices as the reason it’s not selling more new models and purposely place a less expensive, less capable iPhone as the only other option, forcing those who want top-tier devices to pay up. I personally own an iPhone 4S and haven’t felt the slightest tinge of regret not upgrading to the 5. However, I also bought my 4S before the 5 came out. If I were purchasing an iPhone now and my only choices were the iPhone 5 or the technological equivalent of the iPhone 3GS, I’d feel compelled to drop $200 on the newer model instead of saving $100.

These are just rumors for now, with nothing set in stone, and Apple could simply decide to back off these plans as it did previously. If we hear anything more, we’ll be sure to let you know.

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