Report: Apple Working On Discount iPhone Model

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Apple is currently working on a lower-end iPhone model with a less expensive price tag, according to a report from The Wall Street Journal.

There's been speculation for some time that Apple would launch a discount version of the popular iPhone. According to the Journal's report, a discount iPhone could launch later this year and might feature less expensive case materials.

The move would mark a change in Apple's strategy; the company typically stayed away from introducing discount devices and instead has earned a reputation over the years for commanding premium prices for its technology. But the smartphone market has become quite crowded, and Apple is now facing a number of challengers with cheaper alternatives to the iPhone.

[Related: Head to Head: Nokia Lumia 920 Vs. Apple iPhone 5]

Even if the new discount iPhone uses cheaper materials to lower the price to $100 or less, there's still the issue of wireless carrier contracts. The iPhone 5 currently starts at $199 for the 16-GB model, but that deal requires a two-year wireless contract with one of the three major carriers: AT&T, Verizon or Sprint. However, an unlocked iPhone 5 without a contract starts at $649.

When Apple has offered discounted iPhones in the past, the models have been older models on the verge of obsolescence. For example, the company is currently offering the 8-GB model of the iPhone 4 for $0 with a two-year wireless contract. But an unlocked iPhone 4 without a contract still costs a hefty $450.


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