Apple iPhone 5S launch: Will a budget version be launched?

Technology giant has spurred rumours of drive towards surging markets with presentation in China just nine hours after hotly-anticipated California event

A woman looks at the screen of her mobile phone in front of an Apple logo outside its store in downtown Shanghai September 10, 2013. Apple Inc is expected to introduce a cheaper version of the iPhone on Tuesday, bringing one of the industry's costliest smartphones within reach of the masses in poorer emerging markets (REUTERS)

After months of rumours, leaks and speculation, Apple will today unveil its brand new iPhone – the 5S.

The new high-spec model is expected to come with a fingerprint scanner and massively increased internal storage (up to 128GB), but in a similar size and shape to the current iPhone 5.

Under increasing pressure to prove it can still provide technology innovation in the post-Steve Jobs era, Apple has struggled to match the additions rival Samsung has made to its product range, and been criticised for not appealing to emerging markets.

Rumours of a surprise added bonus at the secretive event in California later today have heightened the already fever-pitched anticipation surrounding the event, however.

Shares in the traditionally high-end and trendy technology giant received a small jump after it emerged Apple is expected to release not one, but two phones – with a budget iPhone 5C to go alongside the 5S.

The cheaper version will bring one of the industry’s most expensive smartphones into the realms of possibility for poorer, emerging markets, as the company searches for new revenue streams while iPad and standard iPhone sales fall.

They hope a bigger presence in emerging-market can reverse a 29 per cent fall in the company's share price since it hit a record high of $702.10 a year ago.

That diminution came as industry observers said Apple had not produced a definitive new electronic device since late co-founder Jobs gambled on the iPad in 2010.

But analysts said nothing had come close to the introduction of the iPhone, which now supplies half of Apple's revenue and is its highest-margin product.

“Apple needs to demonstrate in the coming months that it has other product lines which can start to make up for slowing growth and falling margins in (the) iPhone and iPad,” said Jan Dawson, chief telecoms analyst for Ovum Research.

“That's a tall order.”

While we wait to see how the iPhones 5S and 5C stand up to one another, other experts said it was likely those would not be the only news to come out of the event in the company’s Cupertino, California headquarters.

A minor update to the Apple TV line is also anticipated, and in keeping with the drive towards emerging markets, shareholders await with bated breath an announcement of whether or not the smartphone maker has signed a deal with China Mobile, the world’s largest mobile telecoms company.

For the first time, the company will host media in Beijing just nine hours after its California launch, spurring speculation it will announce a distribution agreement with the Chinese carrier. Without the deal, experts say Apple will only ever be able to reach half of the potential Far-East market.

“The only real potential to surprise investors seems to be in the scope and velocity of a new China strategy, and any new features within iOS 7 and fingerprint scanner technology,” said Barclays analyst Ben Reitzes.

“Since it missed the trend toward larger screened phones and seems poised for only incremental iPad improvements, we believe that Apple needs to prove it can innovate in software and services.”

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