September is a big month for Apple. The tech giant is expected to announce two new iPhones and a streaming music service, at a time when it’s facing more competition than ever in the mobile industry.
“From a unit sales perspective, Samsung is eating their lunch,” says Andrew Borg, research director at the Aberdeen Group.
Even though Apple is still making more money, Samsung is selling more smartphones.
“The competition has really ramped up,” says Wayne Lam, senior analyst for mobile handsets at IHS. “So what Apple really has to do this year is come out with something fairly unique.”
But what Apple is doing isn’t so much flashy as affordable. Analysts predict the lower-cost model will cost $100 to 200 dollars less than higher-end Apple phones.
“If you look at a cheaper iPhone, I don’t think anyone is going to look at that and say that’s cool,” says Josh Lowensohn , senior writer at CNET.
But cool may be overrated. Lowensohn says the so-called “plastic iPhone” should compete well with cheaper Samsung Galaxy models.
“People will still dig it, they’ll still buy it,” he says. “And we could see a point where it’s selling more phones than the iPhone 5.”
Chris Silva, an independent analyst covering mobile technology, says Apple is positioning itself to attract mobile users who don’t yet have a smartphone.
“When those people get rid of the old flip phone that they’ve had for five years, they’re looking for a great experience at a lower price point,” Silva says. “So having that lower-cost phone allows them to capture that portion of the market.”
Silva says the cheaper phones should also appeal to the growing number of U.S. cellphone users who are opting for flat-rate monthly plans over long-term contracts.
Apple is also rolling out an update to the iPhone 5, with a new operating system, the iOS 7. Analysts including Borg expect it will include new security features like a fingerprint reader.
It’s also expected to offer iTunes Radio – a streaming music service with millions of ready-made listeners with iPhones in their pockets.