Apple to make iPhone more affordable with 8GB 5C?

Memo points to 8GB 5C to be released this week

Apple may start paying lip service to the critics with the launch of a new 8GB iPhone 5C tomorrow. Sales of the “low cost” iPhone have been underwhelming and it’s no mystery as to why. Reducing the iPhone by $100 doesn’t make a dent in the emerging markets. “But!” says Apple. “What if we reduce the price by…$180!”

That seems to be the strategy, according to a leaked memo from the German carrier o2. The internal email indicates that a new 8GB iPhone 5C will be going on sale Tuesday, March 18, for €509 ($707), which is a price reduction of €60 from the previous price tag of €569 ($791).

Apple currently offers an 8GB iPhone 4S that U.S. customers can get for free with a contract, as well as an 8GB iPhone 4 that Apple sells in emerging markets like China and India. And that leads one to wonder whether an 8GB iPhone 5C will have enough space for all of a user’s apps and content. Will an 8GB iPhone be able to deliver all of the promises of the 5C?

Either way, it likely won’t cost Apple much—if anything—to produce. The question is whether it will be anything more than a drop in the proverbial bucket.

Tim Cook admitted in the company’s last quarterly earnings call that sales of the iPhone 5C were “different than we thought,” which is a pretty huge confession of failure coming from Apple. Many investors fear that the 5C’s failure is largely due to the fact that it is still too expensive for many consumers in unsubsidized countries. Apple was also expected to release an 8 GB iPhone 4 in India for an estimated $245 (R. 15,000), but the company ended up setting the price at $370 (R. 22,900).

The 5C is largely thought to be the least popular iPhone available, and reports from China suggest that it’s not much better over in Apple’s newest market. Data from Chinese analytics company Umeng shows that the iPhone 5 is currently the most popular iPhone in China, accounting for 15% of Umeng’s network, while the iPhone 5S accounts for 12% and the iPhone 5C accounts for a paltry 2%.

BTIG analyst Walter Piecyk has previously estimated that it would take a cut to below $300 on a device for Apple to address the unsubsidized emerging markets. 

Of course, there's no guarantee that Apple will actually release an 8GB iPhone 5C tomorrow, or any time this week. And if it does, there's nothing saying Apple will release it to the rest of the world. But it shows Apple is looking for ways to make the iPhone 5C more popular.