Jan 2, 2009

Tech - Apple may unveil cheaper iPhone

SAN FRANCISCO: Apple Inc will probably begin selling a lower-priced version of the iPhone in the first half of 2009, tapping a new chipmaker for a
key component, according to Friedman, Billings, Ramsey & Co.

Qualcomm Inc will replace Infineon Technologies AG as the supplier of the baseband processor -- the chip that translates radio signals into voice and data -- in the new model, analyst Craig Berger said in a report. The phone might debut in the second quarter, he said, citing unidentified industry sources.

Apple may be turning to lower-cost products to fuel sales in developing countries as the US economy shrinks. The company is planning a smaller version of its Shuffle music player and a cheaper MacBook laptop, Berger said. None of the devices is likely to be ready to be unveiled at next week’s Macworld conference, where Apple typically makes product announcements.

“Mobile phone sales figures will continue to grow worldwide in 2009 and most of that growth will come from developing countries,” said Hakim Kriout, a portfolio manager at Grigsby & Associates, a New York-based securities trading firm that owns Apple shares.

“Turning the iPhone into a product line by adding another device for the lower end of the market is the next logical phase.”

Jennifer Bowcock, Apple’s spokeswoman for the iPhone, didn’t immediately return a call or email seeking comment. San Diego-based Qualcomm’s Bertha Agia also didn’t immediately return a phone call.

Wal-Mart, Best Buy
Apple currently sells two versions of the iPhone, an 8GB model for $199 and a 16GB device for $299. Wal-Mart Stores Inc, the world’s largest retail chain, began offering the product last week, with its starting price at $197. Best Buy Co, the biggest electronics seller in the US, sells the phone for $189.99 and $289.99.

Berger, who contacted parts suppliers, also said that Apple made fewer iPhones in the fourth quarter than originally estimated. That shortfall will be partially offset by greater first-quarter output, he said. About 10 million phones were available for purchase in the fourth quarter, he estimates.

Apple said this month that chief executive officer Steve Jobs won’t appear at the Macworld show, fuelling speculation that the company doesn’t have a significant new product to offer.

Apple will probably use the event to show updated versions of its aluminum-cased iMac desktop computers and a new operating system, Brian Marshall, an analyst at
Broadpoint.AmTech in San Francisco, said.

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