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The new iPhone 5 may not see a lot of demand

The Cupertino tech giant, Apple, is expected to release the next iPhone, the rumored iPhone 5, sometime in September or October thisyear. The new iPhone 5 is rumored to have a lot of new features which will for sure attract a lot of new users, and even first time iPhone users. But will the company be able to increase the demand for the new iPhone? The reports give a negative reply.

This is because, according to the report, most of the iPhone 4S customers are still under contract with their wireless carriers. So if they want to get their hands on the new iPhone 5 now, they will have to break the contract or will have to pay an early upgrade fee, which will not be less. So, people would like to wait for some time, till they are eligible to get the new iPhone 5 at normal price.

An analyst from BTIG thinks that the iPhone manufacturer will not see a lot of demand for the iPhone this time due to the contract period. An excerpt from this report says:

We then further questioned [AT&T chief] de la Vega on whether the impending launch of the iPhone 5 would cause AT&T to offer a tiered early upgrade fee option for customers that were deeper into their contract to perhaps deliver an effective $350 price point into the market and de la Vega flatly said no. The implication is that a large majority of AT&T iPhones will not be eligible for an upgrade subsidy at any level and AT&T’s expectation is that those customers will be unwilling to pay $600 for the new phone.

AT&T is now charging $250 as an early upgrade fee from its customers if they wish to upgrade to the new iPhone at the subsidized cost. This will make the cost of the cheapest iPhone $450. So it pretty much clear that most customers will not be willing to pay up so much to AT&T to get the new iPhone, rather, they would just wait a few more months.