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Old Jul 24, 2013, 02:57 PM   #1
ThatsMeRight
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Apple's 2013 iPhone line-up this fall: budget iPhone talk, and more

So, rumours are getting stronger and stronger that Apple will launch a 'budget' iPhone that is going to replace the iPhone 4/4S. But why would Apple do this? Isn't the iPhone 4 (and more or less also the 4S) the 'budget iPhone'?
Let's have a look.

2011
Budget: iPhone 3GS ($0)
Mid: iPhone 4 ($99)
High: iPhone 4S ($199)

2012
Budget: iPhone 4 ($0)
Mid: iPhone 4S ($99)
High: iPhone 5 ($199)

The most logical thing to do for Apple this year, 2013, would be:
Budget: iPhone 4S ($0)
Mid: iPhone 5 ($99)
High: iPhone 5S ($199)

A budget iPhone doesn't fit in there. What are carriers going to do? Give a customer $100 to get an "iPhone Lite"? No.

There are some very obvious reasons why Apple wants to get rid of the iPhone 4S, and thus it will be introducing an "iPhone Lite" that is cheaper to build, but yet offers equal (or more) functionality as the iPhone 4S.

Short story with bulletpoints (below these bulletpoints, you'll find the long story).
- 4-inch display: every iPhone sold will have the same 4-inch display (unification)
- AirDrop (they will probably push this feature, iPhone 4S misses essential hardware to support AirDrop)
- Materials (they can now drop glass on the back + the expensive antennaband, plastic will be much cheaper (both in material costs and production))
(?) - 8 MP to 5 MP camera? Not sure about this one, but I wouldn't be surprised
- Lightning connector: every iPhone sold will have a Lightning connector, this is important as the $0 and $99 iPhone are becoming more popular under customers

Conclusion: not only will a "budget iPhone" be cheaper to produce, but it is also in the best interest of Apple as a whole because of the push for one single screensize, AirDrop, profit margins and maybe most importantly: Lightning connector.

-- A few reasons to replace the 'budget iPhone 4S' with an all-new 'budget iPhone Lite'

Unification: 4-inch Retina Display, same A5 chip
Not the crucial factor, but I think that Apple wants to get rid of the 3.5" iPhone. I think they want one uniform screen size (for now), and with an iPhone 4S that isn't going to happen. The chip they will use? An A5 chip: the same one as in the iPod touch with 4-inch display.

Air Drop (Wi-Fi)
Apple now has announced AirDrop for iOS 7. It works with iPhone 5 (our mid-end phone) and it will work for the iPhone 5S (the high-end phone). Curious enough, it won't work on the iPhone 4S because the Wi-Fi hardware isn't there to support it.
I think Apple is going to push for AirDrop, and they can't do that when they are selling an iPhone 4S.
My guess: they want the new 802.11a/b/g/n Wi-Fi-chip (just like in the latest iPod touch).

Materials: from glass to plastic, possibly from 8 MP to 5 MP (camera)
The margins on iPhones for Apple are shrinking: the antennaband and glass on front and back are much more expensive than 'just using' a plastic back. Going from a glass back + antennaband to 'just plastic' is going to increase profit margins.
The iPhone 4S has an 8 MP camera, but I wouldn't be surprised if Apple decided to go for the 5 MP camera found in the iPod touch.

Lightning connector
Again: more and more people are going for the cheaper iPhones. Apple is trying to push everyone to go use the new connector, but it doesn't help that (apparently) close to 50% of all sold iPhones still have the old 30-pin connector. The "iPhone Lite" will use the Lightning connector and thus, starting this fall, every single iPhone sold will have a lightning connector. It's good for Apple.

(It's new)
What sounds better in marketing?

- "Here, go buy our 2-year old iPhone"
- "Here, go buy our just-announced and just-released iPhone with shiny new colorus"
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Old Jul 24, 2013, 03:00 PM   #2
Merkie
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I think materials and Lightning are the most important factors. The 4/4S use way too many premium materials for their price point, and the Battle of Smartphones is shifting more and more to the mid-end range (that's where the real growth lies).

Your overal reasoning is solid and I completely agree with you.
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Old Jul 24, 2013, 03:27 PM   #3
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A "budget" iPhone isn't about the US (more specifically, the big three carriers) where you can get a free smartphone with 2-year contract. The current iPhone lineup is already dominating in this situation.

It would be about the rest of the world where the iPhone's current $450 starting price is competing against sub-$100 smartphones.
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Old Jul 24, 2013, 03:47 PM   #4
ThatsMeRight
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Quote:
Originally Posted by Merkie View Post
I think materials and Lightning are the most important factors. The 4/4S use way too many premium materials for their price point, and the Battle of Smartphones is shifting more and more to the mid-end range (that's where the real growth lies).

Your overal reasoning is solid and I completely agree with you.
Yep, those are obviously the most important factors. From a business perspective, you want profit margins to go up and a higher adoption rate of the Lightning connector.

The 4-inch display (and possibly AirDrop) are just 'secondary issues'.

----------

Quote:
Originally Posted by BaldiMac View Post
A "budget" iPhone isn't about the US (more specifically, the big three carriers) where you can get a free smartphone with 2-year contract. The current iPhone lineup is already dominating in this situation.

It would be about the rest of the world where the iPhone's current $450 starting price is competing against sub-$100 smartphones.
I disagree. I think they are completely going to dump the iPhone 4S and the new "$0 iPhone" will be the 'budget iPhone'.

At best, the price of a simlock free device will be slightly lower to make it more attractive for markets like India, and Europe.
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Old Jul 24, 2013, 03:53 PM   #5
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Quote:
Originally Posted by ThatsMeRight View Post
I disagree. I think they are completely going to dump the iPhone 4S and the new "$0 iPhone" will be the 'budget iPhone'.
Not sure what you disagree with. I agree that will likely happen.

Quote:
At best, the price of a simlock free device will be slightly lower to make it more attractive for markets like India, and Europe.
Exactly.
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Old Jul 24, 2013, 04:14 PM   #6
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I wouldn't be surprised in the least if they just dropped the 5 and it was only the 5S and the plastic model. That's the easiest way to fit it in. Like you said, with the way it is now there isn't a place for it, particularly in the US market. But stop making the older models and whala, it fits perfectly.
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Old Jul 24, 2013, 04:20 PM   #7
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Agree with all the above points.

For the US market, I think it will do well with parents buying phones for their teenagers and not wanting to spend a ton. Where they might normally buy a cheap android or an old iPhone, now there is a budget model that the kids will like for the color options. Also good for young professionals who may not be able to afford the newest iPhone.

I doubt they will only sell it in certain markets. It'll be sold everywhere for anyone who wants to buy it. I don't think Apple is worried about it eating into flagship sales.
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Old Jul 25, 2013, 03:30 PM   #8
JarScott
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People are talking about this new plastic iPhone like it's a confirmed product and Apple have announced it. Maybe I missed an event somewhere...
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Old Jul 25, 2013, 03:53 PM   #9
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It will need iPhone 5 specs minus the camera to get more then a one year life cycle.

The 4S struggles with iOS 7 with a 3.5" screen, pushing more pixels is out of the question without better CPU/GPU. It will NEED LTE here in the states (Verizon wont accept new 3G smartphones). It will need more RAM which is another iOS 7 reference. Wifi AC, maybe or maybe not but Apple is pushing all their products that way like the more expensive lightning connector. That said it will have the Lightning connector packaged with the more expensive cable. More expensive screen obviously. Then put it in a plastic housing and sell it LESS then the 4S? And this makes profit? I doubt they could do that with NO housing included.

I bought 3 glass backs for my 4S for 4 dollars new on eBay. And the first one has latest longer then the OEM so I can only assume its of similar/better quality.

All this is assuming the cheap iPhone with run iOS 7 and have a longer life span then 1 year. If Apples plan is to just never update the cheap iPhone and always have "mediocre at best" performance then a iPhone built cheaper then the 4S will work.
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Old Jul 25, 2013, 04:56 PM   #10
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Quote:
Originally Posted by cynics View Post
It will need iPhone 5 specs minus the camera to get more then a one year life cycle.

The 4S struggles with iOS 7 with a 3.5" screen, pushing more pixels is out of the question without better CPU/GPU. It will NEED LTE here in the states (Verizon wont accept new 3G smartphones). It will need more RAM which is another iOS 7 reference. Wifi AC, maybe or maybe not but Apple is pushing all their products that way like the more expensive lightning connector. That said it will have the Lightning connector packaged with the more expensive cable. More expensive screen obviously. Then put it in a plastic housing and sell it LESS then the 4S? And this makes profit? I doubt they could do that with NO housing included.

I bought 3 glass backs for my 4S for 4 dollars new on eBay. And the first one has latest longer then the OEM so I can only assume its of similar/better quality.

All this is assuming the cheap iPhone with run iOS 7 and have a longer life span then 1 year. If Apples plan is to just never update the cheap iPhone and always have "mediocre at best" performance then a iPhone built cheaper then the 4S will work.
It depends on the margins they are willing to accept. The margin they get on current iPhones is astronomical by industry standards. If they are willing to accept lower margins they could sell iPhone 5 internals in a cheaper plastic shell for $400 and still make a very nice profit. When the iPhone 5 was released it was figured to cost in the neighborhood for $210 to build. Now it's a year later and those components are even cheaper now. Add the cheaper to manufacture plastic case and you save even more. (both cheaper to manufacture the case and manufacture the whole phone.) I would be shocked to see them being able to build the plastic version for $150.
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Old Jul 25, 2013, 05:30 PM   #11
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Quote:
Originally Posted by boomhower View Post
It depends on the margins they are willing to accept. The margin they get on current iPhones is astronomical by industry standards. If they are willing to accept lower margins they could sell iPhone 5 internals in a cheaper plastic shell for $400 and still make a very nice profit. When the iPhone 5 was released it was figured to cost in the neighborhood for $210 to build. Now it's a year later and those components are even cheaper now. Add the cheaper to manufacture plastic case and you save even more. (both cheaper to manufacture the case and manufacture the whole phone.) I would be shocked to see them being able to build the plastic version for $150.
That makes sense.

However its all dependent on it selling MUCH MUCH better then any iPhone ever.

The problem or so I've read is that the current oldies (4/4S) don't have as high of a profit margin as the new one. Introducing a new iPhone that is even cheaper would need to sell like an iPhone has never sold before would it not? It would need the volume to make up for the lack of profit.

Maybe Apple just wants to flood the market. Get everyone an iPhone and then like I and many others we decide to get an iMac, then iPad, the ATV, the mbp, etc etc.
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Old Jul 25, 2013, 05:31 PM   #12
srsub3
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I think the switch is good for market and for apple:
Lte makes this phone more appealing
Lighting switches all the devices to latest specs
Bigger screen makes old display past
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Old Jul 25, 2013, 05:32 PM   #13
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Quote:
Originally Posted by cynics View Post
That makes sense.

However its all dependent on it selling MUCH MUCH better then any iPhone ever.

The problem or so I've read is that the current oldies (4/4S) don't have as high of a profit margin as the new one. Introducing a new iPhone that is even cheaper would need to sell like an iPhone has never sold before would it not? It would need the volume to make up for the lack of profit.

Maybe Apple just wants to flood the market. Get everyone an iPhone and then like I and many others we decide to get an iMac, then iPad, the ATV, the mbp, etc etc.
I think they are counting on it selling in emerging markets where the current phones are doing terribly.
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Old Jul 25, 2013, 05:32 PM   #14
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Where's the larger screen size iPhone? More rumors and from credible ones (WSJ) indicate Apple testing it.

Where would it fall?
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Old Jul 25, 2013, 05:38 PM   #15
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Originally Posted by irDigital0l View Post
Where's the larger screen size iPhone? More rumors and from credible ones (WSJ) indicate Apple testing it.

Where would it fall?
If it doesn't debut with the iPhone 6 next year, we won't see it until iPhone 7 in 2016.
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Old Jul 25, 2013, 05:47 PM   #16
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If it doesn't debut with the iPhone 6 next year, we won't see it until iPhone 7 in 2016.
Why?

People keep on saying that Apple might drop the iPhone 5 and have just the iPhone 5S and a lower tier iPhone.

Wouldn't that mean Apple next year with iPhone 6, drop the iPhone 5S and just update the lower tier iPhone?
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Old Jul 25, 2013, 05:51 PM   #17
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Originally Posted by irDigital0l View Post
Why?

People keep on saying that Apple might drop the iPhone 5 and have just the iPhone 5S and a lower tier iPhone.

Wouldn't that mean Apple next year with iPhone 6, drop the iPhone 5S and just update the lower tier iPhone?
Right. The iPhone 6 would need to include the bigger screen or else we won't see it until 2016 since the 6S will look just like the 6.
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Old Jul 25, 2013, 06:02 PM   #18
lordofthereef
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I am happy we have another thread about this.

At least it's not another "iPhone 5S wish list" thread though.
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Old Jul 25, 2013, 10:25 PM   #19
luravua
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That's the easiest way to fit it in.[img]http://**********/zf16[/img]

Last edited by luravua; Jul 25, 2013 at 11:42 PM.
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Old Jul 26, 2013, 12:45 AM   #20
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stronger and stronger rumors, lmao

u can only read that on macrumors
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Old Jul 26, 2013, 08:01 AM   #21
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I could see the lineup being either:

iPhone "mini" 16 GB - $0
iPhone "mini" 32 GB - $99
iPhone 5S 16 GB - $199
iPhone 5S 32 GB - $299
iPhone 5S 64 GB - $399

or

iPhone "mini" 16 GB - $0
iPhone 5 16 GB - $99
iPhone 5S 16 GB - $199
iPhone 5S 32 GB - $299
iPhone 5S 64 GB - $399
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