Will iPhone 5C be Apple’s Budget Phone and will it Revive Growth Prospects?

Will iPhone 5C be Apple’s Budget PhoneLeaked photos have begun to circulate of packaging that will be used for Apple (NASDAQ:AAPL) next smartphone which is planned to be released in September.  Apple enthusiasts in Europe and the United States later picked up the photos, which first appeared on the WeiPhone forum in China.  According to rumors, the material will be used for retail sales of a low-cost version of the popular iPhone line; however, representatives for Apple have not confirmed if this interpretation is correct.

According to AppleInsider, it is rumored ‘that the low-cost iPhone would be made available in a variety of colored plastic enclosures … when it arrives later this year.  They also note that the plastic retail packaging would be consistent with the latest packaging for the iPod touch, which similarly features a plastic container topped off by the device itself, then covered with a transparent cover.’  If this is correct then the ‘C’ in the photos, stands for color.

Meanwhile, analysts keep pouring over Apple’s latest quarterly results.  Based on the company’s comments, Apple’s continued growth in America appears to be tied to addition of T-Mobile (NYSE:TMUS).  At the same time, the iTunes platform, which grew by 25 percent in the most recent quarter, offers an opportunity for growth as customers are buying more of it.  However, iPad sales appear to be declining as the company suffered its first year-over-year decline in that sector and there are fears that weakness in growth markets such as China could negatively impact the company’s performance going forward.

Increasingly competition from Google (NASDAQ: GOOG) and Microsoft (NASDAQ:MSFT) among others have caused some analysts to rethink their guidance on the company.  While the overwhelming majority of analysts have continued to issue a ‘Buy’ rating, 11 market analysts have downgraded the stock to ‘hold’ and analysts at Berenberg recommended ‘sell’.  According to the Financial Times, ‘at 11 times trailing earnings, with a dividend yield of 3%, they (Apple) trade like shares in a huge, slow-to-no-growth tech company … and until that next revolutionary product rolls around, that is precisely what Apple is.’

With a slew of product upgrades are nearing release (iPhone 5s, iPad 5, and budget iPhone (5C?) in September, Retina MacBook Pro in October, and iPad Mini in 2014), the most ground-breaking devices could be the iWatch and iTV – however no release dates have been given at this point.  Furthermore, it would appear that the product development pipeline that was in place at the time of Apple Founder and visionary Steve Jobs’ death is beginning to run dry and in the fast moving tech sector, this could several constrain growth at Apple for the foreseeable future.

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About the author

Audrey is a senior editor for the business and finance sections.