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

[Shanpdx]

Price is the killer!

make it $249 for an iPhone 4 with out contract and make it 16Gb - keep the same internal as iPhone 4 or iPod touch. is it that simple only if apple willing to take a hit on the profit. $70 billion not enough hehehe.

It will sell like hot cake like the iPod touch (8GB).

and of course iPhone 5 goes A5, better display, blah blah blah for $599, $699.

My guess is this year iPhone 5 would not see the same success (early adoption i mean) because of the iPad and MBAs unless ATT comes with some better pricing model and contract requirement (read early upgrade).

 

[MrWillie]

That's why prepaid plans are great. You pay per SMS/MMS/min/MB. With a smartphone, I can disable data usage and still use public/stolen wifi for free. Of course, the costs per min are huge (like 0.09 €cent/min), but then I talk less as well. If I get stuck, I can just turn the data option on the smartphone on and browse for what I want without a monthly fee.

I get so irritated when I head back to the states and can't find good local prepaid SIMs/uSIMs.

Boost Mobile

 

[DesignerOnMac]

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.

I think your forgetting the fact that Apple is making a HUGE profit on the iPone. I think they could keep the iPhone pretty much the way it is, sell it for less, and STILL make a profit. The profits would come from the shear volume if iPhones they could sell, not only in China, but anywhere!

 

[JoshAlder]

Apple will never do a cheap iphone, it cheapens the brand.

 

[maroontiger2k9]

What would a cheaper iPhone consists of?

What I think:

plastics like the iPhone 3GS but perhaps lesser grade
non-retina LCDs
less precise machining of parts during assembly (ex: not fusing glass and lcd like on ipt4 and ip4 models)
even lower res camera, and only rear facing (no facetime support)
cheaper radios, just 3G but like EVDO or something
lower capacities on storage (ex: 4GB, 8GB)

I would hope they don't switch out the capacitive screen for a resistive one (UGH! *shivers*)

what do you guys think?

THIS, BUT...

i dont think they'll downgrade the radio but i think the real kicker will be a separate iOS iphone build that lacks multitasking and possibly lacking gps support

 

[Shanpdx]

Apple will never do a cheap iphone, it cheapens the brand.

when $299 or $249 is cheap?

So they do not sell iPod touch?

they even sell appletv for $99 with some $20 to $30 margin ...

 

[maroontiger2k9]

Apple will never do a cheap iphone, it cheapens the brand.

not true... for years apple had the $999.99 entry level macbook.. instead of the macbook pro $1200 and up

mac has always offered cheaper options...

this phone will probably be a $99 w/ contract $299 w/o.. *my wish* and start attacking not only the PAYG but regular networks as well.. with a BIG EASTER EGG announcing SPRINT as a new carrier for both iphones

 

[MCP-511]

Category-Killer ?

What the hell does that mean?

Thought the same. All apple has to do is price it appropriately/competitively and it will sell itself.

 

[chrissud]

Plans are cheap, phones are expensive.

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.

Well first off, considering that the cheapest iPhone 4 costs USD $780 to buy in China, I'd say it needs to be cheaper. Phone companies do not subsidize handsets like they do in North America.

As for plans, I am on a prepaid plan and I pay about $15 a month and that allows me to talk for hours and text hundreds of times. The per text rate is equal to about 1.5 cents. The per minute rate is roughly 2 cents. So that equals to 750 minutes of calling time or 1000 texts. All that for $15/month.

A country wide data plan for iPhone will then set you back:

$0.77 cents for 30 MB;
$3 for 150 MB;
$15 for 2.5 GB;
$30 for 6 GB

Then each 1MB over your plan costs about $0.70 cents

So 6GB Data, 375 minutes of call time and 500 texts will cost $45/month. Here in the US or Canada you'd pay over $100 for that!

The iPhone needs to be cheaper and we in North America are being ripped off by the carriers!

 

[JoshAlder]

not true... for years apple had the $999.99 entry level macbook.. instead of the macbook pro $1200 and up

mac has always offered cheaper options...

this phone will probably be a $99 w/ contract $299 w/o.. *my wish* and start attacking not only the PAYG but regular networks as well.. with a BIG EASTER EGG announcing SPRINT as a new carrier for both iphones

you mention these but they still price people out of the market. i know alot of people that wouldnt pay $999.99 for a laptop.

 

[Wolfpup]

not true... for years apple had the $999.99 entry level macbook.. instead of the macbook pro $1200 and up

mac has always offered cheaper options...

this phone will probably be a $99 w/ contract $299 w/o.. *my wish* and start attacking not only the PAYG but regular networks as well.. with a BIG EASTER EGG announcing SPRINT as a new carrier for both iphones

Problem is $1000 has been mid range for years now (heck, there are some people who act like it's high end, but I still think of around $1000 as mid range, closer to $2000+ high end).

Anyway I don't think it cheapens the brand. Does the iPod nano cheapen it? I sure don't think so (in fact I like mine better than my touch for audio). I don't like the shuffle-doesn't seem like a real iPod, and mine broke in 3 weeks, but that's certainly not hurting Apple either.

 

[saoir]

It is a fundamental mistake, imho, to look at all people who do not have an expensive smartphone as people who will buy one if it is cheaper.

There are gazillions of people who simply don't want or need email or the web on their hip. They are perfectly happy with texting and phone calls.

Making a cheaper iPhone makes no sense whatsoever to me. It goes against all of the basic ethos of Apple.

 

[Popeye206]

I can tell you exactly what a category killer would be:
Make carriers offer it without data. It can be a phone, it can message, and use wifi for data instead of cellular.

You wouldn't even have to change the price or size or anything. Just offer that deal with a smartphone and watch the sales increase.

+1

I have to agree... this would be killer. So obvious too. Good thinking!

The problem right now for all smart phones is it's either all or none. So having one that is basically the iPhone4 with no 3G/4G capabilities and price it at under $100 on a two year contract and you have a killer product for those who want the phone, want the Apps, but could care less about checking email on the go.

 

[Wolfpup]

It is a fundamental mistake, imho, to look at all people who do not have an expensive smartphone as people who will buy one if it is cheaper.

I think it's the price of the service that's often the issue there, not the phone (in the U.S. at least).

Making a cheaper iPhone makes no sense whatsoever to me. It goes against all of the basic ethos of Apple.

As has been pointed out-no it does not. They already do just this with the iPod nano, shuffle, and even the iPod touch is basically a lower end iPhone. It in no way damages their brand.

There's no way this will be as bad as a shuffle.

Motorola has the Triumph on Sprint's prepaid right now. It's $300 with no contract, has a nice 4" screen, and specs (actually slightly exceeding the iPhone 4) that are like last fall's high end phones.

It doesn't look cheap. There's nothing wrong with it. It's just lower end than today's highest end stuff.

I don't see any reason at all that Apple can't do the exact same thing. Maybe use 512MB (or even 256) + the same CPU and GPU in the iPod/iPhone 4 + 8-16MB, possibly in a somewhat cheaper shell.

It still looks nice, works well...and people can understand that "oh, the iPhone 5 is even better". I just don't see how that hurts Apple at all.

In fact I think it may be critical. We're seeing the beginning of what happened to them with Windows. Android is already outselling Apple considerably, and that will probably only get worse.

Apple needs to get on all the networks, and prepaid. Motorola can do it-and do it with an expensive seeming phone. I do not for a second believe Apple can't do this, and do it well. They NEED this to avoid a repeat of what happened before, and I don't see much of a tradeoff-certainly not a cheapening of their brand.

 

[Wolfpup]

Boost Mobile

Boost and Virgin (Sprint's two prepaid plans) are both fantastic deals, and frankly the phones on them aren't too shabby either...but they both use Qualcomm's CDMA (or Boost also uses iDen), so unfortunately s/he'd have to just buy a separate phone to use the service, couldn't use the existing phone.

Though that may be an excellent idea to do!

I really, really want an iPhone on Boost/Virgin yesterday, and get one on U.S. Cellular too.

 

[Tiger8]

and we in North America are being ripped off by the carriers!

You can say that again! I was in the UK last December and was offered a FREE 500 MB 3G data on the vodaphone prepaid SIM I bought at the airport, just for putting 10 pounds (which are to be used for texting and regular minutes at incredibly cheap rates).

 

[BC2009]

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?

Permanent bans on anybody but Samsung makes no sense for Apple.

1) Apple needs to maintain a viable competitor in the market -- banning Android phones from import would put them in a monopoly position. The last thing Jobs wants in the government telling him what to do.

2) Samsung is undermining the Apple branding and trade dress which Apple needs to attack vehemently. They don't want people associating the Samsung experience with the Apple look. HTC and Motorola (and others) have rather original phone (and tablet) designs. It will be hard for Samsung to change since copying the designs of others is in their DNA.

3) Android manufacturers are barely making a profit and many are taking a loss even though the OS is free. This means that prices will have to go up in order to maintain the status quo if patent license fees are levied against Android. I doubt Apple is afraid of competing with Android on merits rather than price in the smartphone market. If not for Google dumping Android into the market for free to undermine others (a very smart move), then the Android phone prices would not be "free with contract" or "buy 1 for $100, get 1 free" -- there would be development costs to recover. Android's "explosion" is 90% based on price point as evidenced by the many Web usage, network usage, and app download/purchase indicators that show many Android users don't use it as a smartphone.

Mind you, I am not saying that Android is not a capable smartphone OS. It certainly is, but if Apple were giving away iPhones with two-year contracts back in 2009 (before the Android explosion) you would have a bunch of folks walking around with iPhones running only the default set of Apple apps on them and nothing more. Free is free -- it appeals to everybody. For those of us who want a real smartphone, we are willing to pay for the good ones (whether it be iOS or Android) -- and we are going to use them as smartphones.

Settling these patents lawsuits to extract licensing fees gives the Apple (specifically their IP Law department) increased revenue to show (every department head wants to be a revenue generator rather than a cost base). Further, it should bring up the price of Android phones to help combat the "dumping" tactic that Google is so fond of.

NOTE: Google also "dumped" Android in the sense of it once being "free for all open-source" and now once they have the manufacturer's invested they are pulling back and saying "we approve the phone or you don't get timely access to the latest Android version". This is also a form of dumping -- you give better terms to gain market share and increase dependence then you change the terms in your favor once you have your hooks latched where you need them.... Just like drug dealers making the "first one free".

 

[jonnysods]

What's expensive about a $159 phone?

 

[nylonsteel]

re "massive op." for low end iP

its obvious - China, Asia, Latin Americas would go nuts over this
Just do it

 

[unwinded]

Android's "explosion" is 90% based on price point as evidenced by the many Web usage, network usage, and app download/purchase indicators that show many Android users don't use it as a smartphone.

Mind you, I am not saying that Android is not a capable smartphone OS. It certainly is, but if Apple were giving away iPhones with two-year contracts back in 2009 (before the Android explosion) you would have a bunch of folks walking around with iPhones running only the default set of Apple apps on them and nothing more.

This is what a lot of people don't understand. Going by total Android activations is misleading because most of those phones are being given away for free with contract. They don't require a data plan. These users will in all likelihood never buy a single app.

The Android "explosion" numbers also selectively leave out the 90 million iPod Touches and iPads. Android is also not a brand of phone, it is an OS used by several smartphone manufacturers. This is why it cannot be directly compared with iOS which is only for Apple devices. There are only a handful of generations and each is backwards compatible making it easier to scale app support. Android comes in different hardware flavors with different resolutions and screen sizes. Fragmentation even exists at the app store level. The safest apps are low-res 2D ones.

Because of this, iOS and iPhone have a better brand identity and a stronger app store at this point in 2011. So if Apple was giving away free iPhones after contract right now, I do think these users would use the app store. My mother-in-law has a dumb phone and asked me about which apps I had. The awareness it out there.

 

[BillyBobBongo]

Take the 3GS and stick a nice fast processor in it and I'm sold. Hell, if it's as cheap as the rumours suggest I'll even pass on the retina display. The sole reason I own an iPhone is so I don't have to carry an iPod and a phone around at the same time.

 

[WatchTheThrone]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_0_1 like Mac OS X; en-us) AppleWebKit/532.9 (KHTML, like Gecko) Version/4.0.5 Mobile/8A306 Safari/6531.22.7)

This is great something between the iPod touch and iPhone 5....
I think 2 "new" cheaper models should come out. iPhone 4 case with 3GS quality screen....8gb storage....no 3G capabilities so wifi only....keep Bluetooth....lower quality camera like the 3GS and keep it at 320 and it will sell like hotcakes!!
Your second model would be the same but with more storage at 400 bucks and it would still sell!!
I have a 3GS on tmobile and I still see 3GS' sell for 300 used in the classifieds so something in that price range would fly off the shelves like crazy!!

 

[devinci99]

Mad props and respect Apple.

I'm glad to hear potential to make tons of money isn't the only motivator for you to make a low-end phone.

Sticking with the fact you will only enter that market only if you can create a killer phone experience in that market is something I wish other companies would do.

It is pointless for Apple to enter a market unprepared without any experience-enhancement for low end users.

 

[Wolfpup]

This is what a lot of people don't understand. Going by total Android activations is misleading because most of those phones are being given away for free with contract. They don't require a data plan

If you're talking about the U.S., that's not the case. All smartphones need data plans here-every single android activation has data, at least a small amount.

More to the point-I don't know what that has to do with anything. A device running an OS is a device running an OS. You can have no data plan and pay tons for programs, or vice versa. Every single iPod sold has no data plan, and millions of them are running tons of programs.

The Android "explosion" numbers also selectively leave out the 90 million iPod Touches and iPads. Android is also not a brand of phone, it is an OS used by several smartphone manufacturers.

Now this is a great point, if true. Though still, Android is clearly a huge threat to Apple-they MUST compete, and not just do what they did against Windows. They must adapt, or become irrelevant.

There are only a handful of generations and each is backwards compatible making it easier to scale app support.

There's probably more Android stuff, but not THAT much more. You've got the same basic generations and what not. Android's kind of a mess, but that's not reason for Apple to ignore this either.

 

[winston1236]

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

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

totally unrelated to this story...but i agree, make it a 30" screen and i'll take it