September 11, 2013

Apple goes plastic on new iPhone

Analysts say the iPhone5C may not be cheap enough to cut into Samsung's dominance of the low-end market.

The Associated Press

CUPERTINO, Calif. — For the first time since introducing the device that changed cellphones forever, Apple will offer two distinct versions of the latest iPhones – a cheaper one made of plastic and another that aims to be "the gold standard of smartphones" and reads your fingerprint.

Apple unveiled the latest iPhone models, available on Sept. 20, during an event at its Cupertino, Calif., headquarters. The move comes as the company tries to fend off Samsung and other competitors that want to challenge Apple in the competitive smartphone market. The lower-cost iPhone 5C is expected to help boost sales in China.

Research firm Gartner Inc. estimates Apple had a 14.4 percent share of the world's smartphone market in the second quarter of this year, No. 2 behind Samsung's 31.7 percent.

The lower-cost iPhone 5C will be available in five colors – green, blue, yellow, pink and white. CEO Tim Cook calls it "more fun and colorful" than any other iPhone. The 5C has a 4-inch Retina display and is powered by Apple's A6 chip. It also has an 8 megapixel camera, live photo filters and a rear cover that lights up.

The iPhone 5C will cost $99 for a 16 gigabyte model and $199 for a 32 gigabyte model with a two-year wireless contract.

Jefferies analyst Peter Misek called the phones "lovely," but said in a note to investors that the $99 minimum price for the 5C "is higher than expected and still leaves Apple with a product gap in the low-end."

Without a contract, the 5C costs $549 and $649 depending on memory size.

The second phone, the 5S, is "the most forward-looking phone we have ever created," said Phil Schiller, senior vice president of worldwide marketing at Apple. It will come in silver, gold and "space gray" and run a new chip, the A7 that is up to twice as fast as the A6.

Schiller said the new phone can run more health and fitness applications. These apps have become increasingly popular as more people use them to track exercise routines, calorie intake and even sleep patterns.

Investors seemed unimpressed. Apple's stock price fell $11.60, or 2.3 percent to close Tuesday's trading at $494.58.

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