Apple 'to start making lower-cost iPhone next month'

Company will divide assembly work between two Taiwanese manufacturers, Bloomberg says

A shopper browses an Apple Inc. iPhone display at a Target Corp. store in Chicago, Illinois, U.S., on Saturday, Nov. 16, 2019. Target Corp. is scheduled to release earnings figures on November 20. Photographer: Daniel Acker/Bloomberg
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Apple will begin manufacturing a new lower-cost iPhone next month, as the company aims to attract new customers and grab a wider share of the global smartphone market, according to a report.

The new, cheaper phone is expected to go on sale as early as March, Bloomberg reported on Wednesday.

The Cupertino-based company has divided the assembly work for the new handset between Taiwanese manufacturers Hon Hai Precision and Wistron.

The new model would be Apple's first lower-cost smartphone since the launch of the iPhone SE in 2016, which had a starting price of $399 (Dh1,466).

Apple’s cheaper iPhone SE enjoyed strong sales in emerging markets like China and India, with the company selling nearly 30 million units in 2016, but it stopped manufacturing the phone in September 2018.

The size of the new model is expected to be around 12 centimetres and will share most of the same hardware as its more expensive counterparts. However, it will not have the phoone maker's Face ID biometric authentication, but will feature the same processor as Apple’s current flagship device, the iPhone 11, the report said.

The decision to offer a more economic iPhone has come at a time when the company is struggling with smartphone sales.

Revenue from the sale of the iPhone dropped more than 10 per cent year-on-year to $33.4 billion (Dh122.6bn) in the fourth quarter of the last year to September 28, the company said.

In the third quarter, iPhone sales generated only $25.9bn, making it the first time since 2012 that the company generated less than half of its total quarterly revenue from its flagship device.

A cheaper offering may help Apple to compete with mid-range smartphones from its rivals Samsung and Huawei and to meet its goal of 200 million shipments in 2020. The company is also expected to launch four 5G-enabled iPhones in September.

Overall, global smartphone shipments grew 3 per cent in the third quarter of last year, according to US market researcher Strategy Analytics. This was the first quarter of positive growth in the past two years.

South Korea's Samsung led the industry with a 21.3 per cent market share, followed by China's Huawei with an 18.2 per cent share and Apple with 12.4 per cent. Apple lost its number two market position to Huawei in April last year.