Apple Inc. (AAPL), Google Inc (GOOG): Two iPhones Are Better Than One

Well, at least that’s what Apple better hope happened. It probably wouldn’t want to admit that folks went cheaper because Apple’s latest iPhone wasn’t improved enough. Then again, we’re seeing cheaper Android smartphones outsell Apple’s cheaper smartphones, so perhaps the more damaging nugget there is that Apple’s old stuff isn’t good enough to take on Android’s new stuff.

This is where the cheaper phones come in. The market may not applaud the announcement. Wall Street wouldn’t cheer if Chipotle introduced a dollar menu or if Tesla began offering Kia-priced cars. However, Apple is at the point where it needs cheaper devices if it doesn’t want to continue to shrink in relevance.

This is what’s happening, especially overseas in markets where carriers don’t subsidize smartphones. As the smartphone migration continues, the new buyers don’t necessarily have the means of the early adopters. Google Inc (NASDAQ:GOOG)’s open-source platform is an easy sell.

Apple Inc. (NASDAQ:AAPL) needs to put up a fight against Android before there isn’t a battle at all. Offering cheap margin-zapping iPhones will be important for a company’s that’s starting to realize that it can’t simply up the stakes on features and keep the price the same.

Rolling out cheaper iPhones with current features can’t happen soon enough.

The article 2 iPhones Are Better Than 1 originally appeared on Fool.com and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.