The iPhone is immensely profitable for Apple, but its share of the worldwide smartphone operating system market is heading south. In the second quarter of 2013, Apple's slice of the global smartphone OS pie shrank by just over 3% year-over-year, according to research firm IDC. And in key developing markets such as China, Android mobile devices dominate.
The solution? A cheaper version of the iPhone -- everyone's calling it the iPhone 5C, and you can decide what the "C" stands for -- is expected to debut Sept. 10. Leaked photos show a polycarbonate iPhone 5C shell that comes in multiple colors. The phone will cost less than the premium iPhone 5S model and appears to be targeted mostly at developing markets where Apple handsets have been too pricey to gain a foothold. Presumably cheaper to manufacture, the iPhone 5C is expected to replace the iPhone 4/4S at the low end of the Apple phone family. One key question remains: How low will Apple price the iPhone 5C?