Will Apple's Cheap iPhone Be Cheap Enough?

As next week's iPhone event approaches, more rumors and leaks have suggested that Apple will indeed announce the much-talked-about cheap iPhone, and yet, the price remains a mystery.

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As next week's iPhone event approaches, more rumors and leaks have suggested that Apple will indeed announce the much-talked-about cheap iPhone, and yet, the price remains a mystery. The latest "leak" comes by way of a Chinese phone company that posted images of the forthcoming S and C on a company owned webpage. The Wall Street Journal's China Real Time Report has a screen shot of the page, which has since been taken down, showing a 5C and a 5S for sale. The images, in Chinese, don't have any revealing details on price, arguably the most interesting aspect of the budget device. So how much will it cost?

The earliest cheap iPhone rumors pegged the price at $99 to $150, sources first told Bloomberg back in January. That range, however, could indicate either the subsidized or retail value. More likely, that's the price with a two-year contract. As telecom analyst Benedict Evans explains over on his personal blog, the $100 to $150 range "requires too many product experience compromises from Apple, while the leaks we've seen so far seem to show a device that would not be priced $200 or under." This Casio Commando smartphone, which looks like the most stripped down version of a computer-connected phone, is the cheapest phone Verizon sells and it retails for $150, without a contract.

Phones that are closer to what people expect from 5C, however, retail for around that $100-$150 price — but that's only after the carrier subsidy in exchange for signing a two-year contract. The Samsung Galaxy S III, for example, sells at Verizon for a subsidized price of $99. That iPhone 4S right now sells for a subsidized $99, as well. But the retail price of those devices is a lot more than: the iPhone 4S costs $450 dollars — about $200 cheaper than the current top-of-the line iPhone 5.

Analysts have predicted that the unsubsidized price of Apple's low-end phone will come be anywhere from $300$350$400, to $450. Evans, however, suggests that dropping the price to $300 won't be very noticeable to American consumers because the wireless carriers will simply reduce the subsidy for the iPhone 5C, which will make the "cheap" iPhone look like it has the same price as the more expensive models.

But Apple probably is not thinking about the American market for the 5C. In countries like China and India — that is, the markets where Apple has had a harder time competing in with lower-cost Android handsets — a $300 5C won't be that cheap either. The Android phone competition in those markets sell for $300 or less.

Evans suggests that Americans won't be that interested in a phone made to be price-competitive overseas.k But maybe that doesn't matter. Apple would likely be happy if American consumers continued paying a premium for its high-end phones and have its lower-end phones catch on abroad.

This article is from the archive of our partner The Wire.