Apple gears up for production on new iPhone, low-cost version

Apple is gearing up for production on an updated version of its iPhone and is working on a low-cost version aimed at emerging markets, according to reports.

Citing “people familiar with the device’s production”, The Wall Street Journal reports the tech giant will soon begin production on a “refreshed” iPhone, to be launched during the second quarter of this year, which is set to be similar in size and shape to the iPhone 5.

Apple is also reportedly working with manufacturing partners on a four-inch version of the iPhone for emerging markets, including China and India, which will use a different casing to the current iPhone.

News of the low-cost iPhone, which is expected to launch as soon as the second half of this year, comes as China accepted an apology from Apple chief executive Tim Cook over the company’s short warranty period in China.

Last week, state-run newspaper the People’s Daily attacked Apple for only offering consumers in China a one-year warranty, unlike some other markets, with the company accused of “unparalleled arrogance”.

This prompted Apple chief executive Tim Cook to apologise publicly via a statement on Apple’s official website in China.

“We are aware that owing to insufficient external communication, some consider Apple’s attitude to be arrogant, inattentive or indifferent to consumer feedback,” Cook stated.

“We express our sincere apologies for causing consumers any misgivings or misunderstanding.

“[We have] much to learn about operating and communicating in China.”

According to Reuters, state-run media in China appears to have accepted Apple’s apology.

“The company’s apology letter has eased the situation, softening the tense relationship between Apple and the Chinese market … Its reaction is worth respect compared with other American companies,” a leading state-run newspaper, the Global Times, states.

China is now Apple’s second largest market, with revenues growing to $6.8 billion during the final quarter of 2012, despite just holding 8% of the Chinese market and the iPhone being unavailable on the nation’s largest carrier, China Mobile.

Overall, China has overtaken the US as the world’s largest smartphone market as of May last year, despite the nation having a smartphone penetration rate of just 22%, with more than 247.2 million users on 3G networks.

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