Analysts last year predicted that Apple would launch a lower-priced iPhone to cater to more affluent consumers in developing smartphone markets, like China and India. For the most part, they were disappointed with the iPhone 5C, and criticized Apple for not cutting the price further and going after market share.
iPhone ownership skews toward older models in China, where subsidies play a smaller role and prices matter more than in the U.S. (Data: Kantar WorldPanel.)
Milanesi beat that drum again, believing that Apple needs to do more in 2014 to entice Samsung's premium customers to switch to the iPhone. "Apple needs a price point [for a new model] closer to the iPhone 4S, which is still selling quite well in China. Will that happen? I don't know," she said.
On Apple's China online store, the 8GB iPhone 4S sells for 38% less than the lowest-priced 16GB iPhone 5S, and 20% less than the 8GB iPhone 5C.
"From an Apple perspective, you have to put price in the equation," Milanesi asserted.
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