iPhone 5 to be discontinued in favor of 2013 iPhone models?

July 25, 2013

Low-cost iPhone A South Korean report claims that Apple will discontinue the iPhone 5 this fall and replace it with the new iPhone 5S and its low-cost version, in what could be a first for the company.

So far, Apple has always kept the older model in stock, selling it for $100 less than the newest iPhone. In fact, Apple also sell iPhone models that are two years older than the latest generation smartphone. At this time, the company has three iPhone models in its stores including 2012 iPhone 5, 2011 iPhone 4S and 2010 iPhone 4.

It’s also worth mentioning that Apple has never launched two distinct new iPhone models, always being faithful to its one new handset per year policy

However, that may change later this year, assuming that the ETNews report is accurate. The iPhone 5 could reach end of life sooner than expected, in order to make room for the iPhone 5S and the low-cost iPhone. In such a scenario, it would be safe to assume that the iPhone 4 and iPhone 4S would also be discontinued.

The publication seems to indicate that the iPhone 5’s touchscreen is “not suitable for low-volume production,” which would explain why Apple would want to discontinue the iPhone 5.

At the same time, current reports indicate that the iPhone 5S will be similar to the iPhone 5 design-wise, which, if true, would mean that some of the iPhone 5 parts could be used to build the next-gen flagship.

Interestingly though, a Current Editorials report says that the budget iPhone will actually be a refreshed iPhone 5 model that would be cheaper to mass-produce, somewhat contradicting ETNews.

The low-cost iPhone would have a plastic case that’s apparently going to be available in a variety of colors and would sell for $99 with new two-year contracts.

A variety of purportedly leaked images showing low-cost iPhone cases seem to back up the Current Editorials’ story, as the alleged cheaper iPhone does look similar to the iPhone 5. However, such images are yet to be confirmed at this time.

The same report indicates that the iPhone 4S would also be kept in place:

“Refreshing the iPhone 5 with a selection of plastic parts in lieu of an additional iPhone model will alleviate part constraints on the upcoming iPhone, which is expected to match the physical design of the current iPhone 5, while keeping the number of iPhone models concurrently being assembled at three (iPhone 4S, refreshed iPhone 5, new iPhone.”

The publication says that the 2013 iPhone models will be announced on September 18 during a special media event and will be available on September 27.

While these dates can’t be confirmed at this time though, an analyst seems to believe that Apple’s recently announced guidance for the fourth quarter of its 2013 fiscal year indicates that the company will launch new products this quarter. BTIG analyst Walt Piecyk says that Apple’s numbers – revenue of $34 billion to $37 billion and gross margins of 36-37 percent – are only possible if a new product arrives:

“We don’t think that Apple can hit its newly issued revenue guidance for the September quarter unless it launches new products,” Piecyk said in a note to clients. “After delivering $35 billion in revenue in the June quarter, management guided to $34-$37 billion next quarter. Revenue would more typically drop multiple billions if the company had no new products planned.”

Piecyk further added that Apple would have to launch a new iPhone rather than a new iPad this quarter, to reach its targets.

The company reported Q3 FY2013 results earlier this week, beating Wall Street expectations, and revealing a record number of iPhone sales for the period.

The iPhone 5S will reportedly go to mass-production later this month, supposedly alongside the budget model.

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