Apple is rumoured to have begun building a cheaper version of the iPhone in order to grow market share in emerging nations, according to sources charged with building the device.
Two sources confirmed to Reuters that a Korean components maker has started manufacturing 8GB flash drives for the cheaper iPhone model. Apple currently uses Toshiba and Samsung for its flash drive components.
IDC analyst Francisco Jeronimo believes it highly likely that Apple will launch a cheaper version of the iPhone with reduced specifications, most likely the camera, memory and hardware quality, in order to boost market share.
"Apple is losing market position in western Europe, and Android is dominating the market in emerging nations such as China, so the firm needs to fight back. Bringing out a mid-tier device would help them do this," he said.
"It's not just Android, though. Microsoft has confirmed it will offer cheap prices on its Windows Phone 7 platform in emerging markets to gain market share, so Apple needs to reduce the prices of its products to around the $200 mark."
Jeronimo added that Apple is likely to launch the device in the near future to begin its fightback, and that the firm's rivals will face tough competition owing to Apple's superior brand awareness among consumers.
Richard Windsor, an analyst at Nomura, said in June at the Open Mobile Summit that he expected Apple to launch a cheap version of the iPhone 4 to improve market share and maintain its strong financial position.
The sources also confirmed that Apple is targeting the end of September as the launch date of the next model of the popular device, the iPhone 5, in line with most speculation surrounding the hotly anticipated smartphone.
The iPhone 5 is expected to have a larger screen, an improved antenna to overcome call quality issues, and an 8-megapixel camera, the sources added.
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