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Apple Requiring an 'Innovative, Category-Killer Experience' for Potential Low-End iPhone

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Barron's reports on a brief note from RBC Capital Markets analyst Mike Abramsky, who shares some of his "takeaways" from a meeting with Apple Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer.

According to the note, Cook and Oppenheimer continue to believe in a "massive opportunity" for Apple in China, seeing the potential for significant growth there with the company's recent explosion to $9 billion in annual revenue for the market being only the beginning.

Many have viewed the introduction of a low-cost iPhone for the prepaid market to be key for Apple's future success in China and many other countries, and the Apple executives reportedly noted that any such device would have to be "an innovative, category-killer experience". Cook and Oppenheimer obviously did not specifically confirm plans to launch a low-cost iPhone, but it is clear that Apple is working hard on finding a way to break into and succeed in that market.
They include the fact that Apple has a "massive opportunity" in China, with the market there "significantly untapped" despite Apple revenue of $9 billion in the country. Despite an "explosion" of devices based on Google's (GOOG) "Android" operating system, Apple can maintain a competitive advantage through its integration of hardware and software, and its "curation" of the "application ecosystem."

Regarding a low-cost iPhone, Abramsky writes that "Apple's primary criterion for launching a lower-end iPhone is an innovative, category-killer experience."
Click to expand...
Other topics of the discussion included word that Apple's gross margins for the quarter may be better than expected due to it currently being a "buyer's market" for components, and the company's efforts to settle with Android handset manufacturers in the numerous ongoing patent disputes.

Article Link: Apple Requiring an 'Innovative, Category-Killer Experience' for Potential Low-End iPhone
 
Article Link
https://www.macrumors.com/2011/08/05/apple-requiring-an-innovative-category-killer-experience-for-potential-low-end-iphone/
Menopause

Menopause

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Feb 26, 2011
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Does anyone here know of any harmless weed I can smoke till September ("Fall") ? This wait is killing me.
 
A

applefan289

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I can't wait for the next refresh of iMacs.

There will be no disc drive and it will be thinner (redesigned probably).
 
acidfast7

acidfast7

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Please, make it 279€ unlocked and unsubsidized.

In this case, I wouldn't care about 4G/LTE, slow processor(s) and minimal storage space.

Basically, merge the iTouch and "cheap" iPhone product lines.
 
DrJohnnyN

DrJohnnyN

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Jan 27, 2010
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Time for Apple to corner the market in low-end products.

If we do see a cheap iPhone, one thing is clear: it would have to live up to Apple’s exacting standards.
 
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omegaphil6

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Aside from just offering a 3GS or iphone 4 (with plastic instead of glass) for Prepaid markets, i dont see how Apple can pull this off. If they introduce a Low Cost iPhone that is a new device It seems the device may be crippled in some sense which, of course, will be fuel for apple-bashing due to the phone lacking the ability to run iOS5 or be hindered by only certain apps functioning on the phone. Offering, lets say, a 4GB iphone without expansion capabilities would defeat the purpose of it being an iphone at this point. Apps and movies and music would simply fill up the phone way to quickly. removing Wifi would cripple certain OS functions that rely on wifi and most prepaid phones include bluetooth as a standard so im not sure what they could leave out.
 
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commander.data

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MacRumors said:
the company's efforts to settle with Android handset manufacturers in the numerous ongoing patent disputes.
Click to expand...
So Apple is trying to look for settlements with Android manufacturers rather than playing hard ball and only looking for permanent import bans or taking the case to completion to look for full damages?
 
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ade2bee

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Dec 13, 2009
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omegaphil6 said:
Aside from just offering a 3GS or iphone 4 (with plastic instead of glass) for Prepaid markets, i dont see how Apple can pull this off. If they introduce a Low Cost iPhone that is a new device It seems the device may be crippled in some sense which, of course, will be fuel for apple-bashing due to the phone lacking the ability to run iOS5 or be hindered by only certain apps functioning on the phone. Offering, lets say, a 4GB iphone without expansion capabilities would defeat the purpose of it being an iphone at this point. Apps and movies and music would simply fill up the phone way to quickly. removing Wifi would cripple certain OS functions that rely on wifi and most prepaid phones include bluetooth as a standard so im not sure what they could leave out.
Click to expand...

I don't think you left anything out there from what I was thinking... The one reason for a low range iPhone with a limited storage would be for the exact reason I was talking about last night

My father is looking for a cheap(er) smartphone, Bar the bank app, RAC (breakdown service) and the odd sudokoo game he would have no need for a multitude of apps... He wants an iPhone with all it's native apps, but can't justify the cost of it at the moment ... This market apple could tap into... but as I think you said, just keep an 8GB version of the previous model as the cheapy would suffice and drain stocks too
 
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Superken7

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Feb 13, 2011
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arbitter said:
There is no product calles 'iTouch'. Or at least not from Apple. I presume you are referring to the iPod touch?
Click to expand...

(Hope you were being sarcastic)

Grammar nazis and spelling nazis are something common, but product naming nazis are new to me! ;)
 
AppleScruff1

AppleScruff1

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Will the carriers come out with better data plans to go along with the cheaper iPhone, or will they stay the same? The data plan is what really makes any smartphone expensive to own.
 
Sackvillenb

Sackvillenb

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Canada! \m/
That would be a very interesting market to enter... and I think it would be good for both Apple and the consumer... But it would have to be a solid phone. A category killer, as they say!

And depending on the differences, I would buy a "cheap" iphone in a second! Something kind of like the ipod touch I suppose... but with a phone built in? Yes I know that sounds like the existing iPhone, but there's a big price gap there...
 
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mutantteenager

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Feb 26, 2006
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I don't believe that Apple are capable of doing 'cheap'. More likely it will be previous gen sold at a discounted price. It's probably something that the carriers will offer, distancing Apple from the 'discount' image.

Either way, it won't be isolated to China if they do, as every market will demand the 'lower cost' device/contract.

My money is not on a new product.
 
Popeye206

Popeye206

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A cheaper iPhone would be killer in the market. Not sure what they can do to make it more innovative than the current iPhone 4?

But that said, if they have to do something innovative at the low end, then I would think the high-end iPhone (which is what I would care about) would also have to include these innovative features.

Can't wait to see what's really coming. This fall is going to be so much fun!
 
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Tiger8

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May 23, 2011
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Remember that Apple did tap into 'budget' market earlier with the hugely successful iPod line; they could have simply stuck to the iPod, but then they created the iPod mini and the Shuffle.

I don't see why Apple wouldn't release two iPhones this time around; the iPhone 5 with all the bells and whistles, and another lower cost iPhone for prepaid and emmerging markets (not necessarily smaller in size, but maybe with cheaper non-Retina display? slower processor? 8 GB storage?).
 
FriarNurgle

FriarNurgle

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Jan 2, 2011
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I know China has to be a major focus for Apple. Would it be possible to get a little info on the cellular plans there? Until then, it's difficult to speculate how Apple should proceed with a "cheaper" phone.

Regarding the US market, I think cheaper phones are kind of silly. You are going to pay the same per month regardless of what phone you get. Sure some people may not be able to spend $200 on a phone, but chances are they will likely get an Android over a last gen iPhone. Maybe a cheaper "entry level" iPhone that isn't last gens model might make some inroads. However I personally feel an iPhone that doesn't require a voice plan (think 3G iPod Touch with phone earpiece speaker) would make a bigger impact.
 
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DTphonehome

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The current iPhone is "category-killer" already. Just release a cheaper prepaid model already… the developing world is way too big a market to ignore, and Android is quickly dominating that market.

An iPod touch with cellular radios is really all it would take, and shouldn't cost more than $300-350 off-contract.
 
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cvaldes

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AppleScruff1 said:
Will the carriers come out with better data plans to go along with the cheaper iPhone, or will they stay the same? The data plan is what really makes any smartphone expensive to own.
Click to expand...
Perhaps.

There are already handsets in the same price range as the iPhone. In a market like China, there are way more iPhones on the networks there than the number of iPhones sold in the country: lots of grey market handsets. The Chinese mobile operators know that the demand is there and that a portion of the populace are very capable of paying the current rates.

More likely, there would probably be the introduction or tweaking of tiered plans to make the entry-level one more affordable.

We've seen that here in the United States with AT&T Mobility: the entry-level iPhone rate plan is about $55 per month (450 min.; no SMS plan; base data, about 250MB if I recall correctly). That's quite a bit lower than what was being charged a couple of years ago as the entry-level iPhone rate (about $80/month).
 
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arbitter

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Nov 12, 2010
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Superken7 said:
(Hope you were being sarcastic)

Grammar nazis and spelling nazis are something common, but product naming nazis are new to me! ;)
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Yesyes sarcastic, no worries! Apparently MacRumors visitors do not like sarcasm, since I have -7. Oh well.

I'll give my on-topic view now. I like the idea of a cheaper iPhone. I don't have one yet, and the large price tag is the reason. 750 euro for only 32 GB of memory, no thanks. This is also something my dad brings up all the time; the iPhone competes with all the other phones in every way, except for the pricing. It wouldn't only convince me to buy one, it would be easier to buy a new one after two years. Also, the thing everyone brings up as a minus point of the iPhone is the huge pricing.
 
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