Apple’s iPhone 5C expected to help Apple’s margins recover

[RaduTyrsina]

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According to a new report by ISI Group analyst Brian Marshall, Apple is probably on its way of solving a lot of issues with the launch of the low cost iPhone 5C. Apparently, the company’s gross margins slipped in 2012 when they were placed at 42.8%, way down to 36.9% in 2013.

He views the cheaper iPhone as a way for Apple to climb back to the 40% it had a year ago. More than that, he be​​lieves the iPhone 5C will do wonders for the Cupertino tech giant in the international markets, allowing Apple to increase its marketshare in foreign countries. He is thinking of emerging markets especially, where most of the potential Apple consumers are unable to spend up to $649 for an unlocked and contract-free iPhone 5. Apple’s profits are at their loftiest in well developed countries such as the United States but aren’t that spectacular in China or other countries where the buying power isn’t as strong.

Marshall envisions the hardware assembly of the iPhone 5C costing up to $160, while placing the overall cost of the device to $340. Bearing such an offer, the tech giant might hope to partner with one of the world’s largest wireless providers – China Mobile which has about 740 million subscribers. Japan’s NTT DoCoMo with its 62 million subscribers is also missing from Apple’s portfolio. Marshall believes the above mentioned carriers are important keys to the unlocking of Apple’s future success.

Source: AppleInsider