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Smartphone News Byte: Why Apple's Budget IPhone is Risky Business

Wochit 1:24 mins

Apple's plan to release a budget iPhone is clearly fraught with peril for the company: It needs to make sure that it gets an affordable device out to consumers in emerging markets without sacrificing too much of the profit margins that have made it one of the most profitable companies in world history. Barron's points us to a new research note from?UBS analyst Steve Milunovich, who outlines in detail why making a cheaper iPhone is really a risk for Apple's traditional business model. In particular,?Milunovich thinks that by going "down market," Apple will be well outside its comfort zone as a premium brand. The first phone using the upstart Tizen operating system was originally slated to launch in July or August, but has been pushed back to the fourth quarter. With smartphones and tablets replacing PCs as the the default computing device for many consumers, so, too, is data traffic shifting from fixed to wireless networks. The analysts at Strategy Analytics believe that this movement, combined with the wider trend for increasing time spent online, is going to translate to a huge increase in wireless data traffic -- which is set to rise by some 300% by 2017 to a peak of 21 Exabytes, from just 5 Exabytes in 2012.

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