Apple to Discontinue iPhone 5 Alongside Launch of 5S and Plastic Models?

[gnasher729]

Might this be a yield issue? It could be hard for Apple to make a profit selling the iPhone 5 for $99 along with the 5S the next model year. The iPhone 5 case is hard to make.

If the 5S is the top iPhone model then having the plastic ones as the less expensive alternatives with iPhone 5 guts allows Apple to make more profit per phone.

When Apple released the iPhone 5, they could build it for X dollars and sell it at a profit. We can safely assume that today Apple can build an improved phone for X dollars. The question is: For how much can they build an iPhone 5 today? Just because you can build something better today for the same price, doesn't mean you can build the old thing for cheaper. And if they can't build it much cheaper, then there's no point in selling it.

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The iPod revenue is down to only 2% of turnover. Yet makes up so many, many models surely it's line is also due for real shake up. Even at 2% with a jump at xmas there can't be that many iPods including the Touch being sold. They could kill off vast part of the iPod family.

They all make lots of money. It's not a large percentage of a hugely profitable company, but many many companies would be very happy if the iPod line were their only product. Sales are going down, of course. Every iPhone sale is one potential customer who definitely doesn't need an iPod Touch; they might want an iPod Shuffle or an iPod Classic in addition to their iPhone, but the majority will be just fine with their phone today. But I think they can just continue building these iPods and putting them on their website and in a small corner of the stores, and sell them forever. It's all money in the pocket.

 

[M-O]

Still having a hard time seeing how Apple will distinguish the two to consumers, besides camera and screen quality. They both will have to run the same iOS so the processing speed shouldn't be too far off...

an iPhone 4 and iPhone 5 run the same iOS.

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Just drop 4&4S not 5

iPhone 5S
iPhone 5
Low-cost iPhone

it makes more sense to me

How? It's better to have 2 models that are obviously different. Customers know they are getting the "consumer" model when they get the plastic one vs metal.

This will also tell customers that plastic means low-end. This will put pressure on their competitors who sell plastic phones at the same price point as Apple's metal "pro" models.

 

[Gluben]

I think they will stop going with the iPhone 5S or 6 idea and simplify it like they do with the iPad:

iPad and iPad mini
iPhone and iPhone mini

That way, you avoid the confusion with iOS versions (e.g. iOS 7 running on iPhone 5S or 6).

Also, I reckon they'll increase the size from 64GB to 128GB and have:

iPhone (128GB)
iPhone (64GB)
iPhone (32GB)
iPhone mini (128GB)
iPhone mini (64GB)
iPhone mini (32GB)

Nice and simple really.

 

[Chupa Chupa]

Still having a hard time seeing how Apple will distinguish the two to consumers, besides camera and screen quality. They both will have to run the same iOS so the processing speed shouldn't be too far off...

The BMW 135, 335, 435, and 535 all run off the exact same engine too. Consumers understand the difference between each model, which run $10s of thousands apart not just hundreds.

Same goes for many other brands who have entry to luxury models of essentially the same product.

 

[Tiger8]

I think they will stop going with the iPhone 5S or 6 idea and simplify it like they do with the iPad:

iPad and iPad mini
iPhone and iPhone mini

That way, you avoid the confusion with iOS versions (e.g. iOS 7 running on iPhone 5S or 6).

Also, I reckon they'll increase the size from 64GB to 128GB and have:

iPhone (128GB)
iPhone (64GB)
iPhone (32GB)
iPhone mini (128GB)
iPhone mini (64GB)
iPhone mini (32GB)

Nice and simple really.

Why would there be confusion about iOS? Currently, iPhone 4, 4s, and 5 all run iOS 6. In September, all of them, and the 5s, will run iOS 7.

Apple has never sold a device with an older verison of iOS.

 

[69650]

My guess is they'll follow what they did with the iPad.

Drop the iPhone 5 & 4/4s leaving just 2 phones with no numbers:

The new iPhone - in 32GB, 64GB, 128GB
The iPhone Lite - in 8GB, 16GB, 32GB

That provides 6 iPhone options against the current 5 options with the iPhone 4/4s/5

 

[cynics]

I'm becoming more and more curious what they are gonna do.

Its not like an aluminum housing is some futuristic material that will offer 500 dollars per device of savings to apple to manufacture.

I'm starting to wonder more and more about the 5S/6. Maybe it will offer something fantastic that leave it unreasonably cost to some. And the cheap model will be your goto for average folk.

 

[powers74]

Apple has made plastic phones before (most recently the iPhone 3GS).

Yes, I realize that, thanks.

I just find it slightly strange/interesting/weird/gross that they would go back to plastic now, since everything else they make that you touch on a regular basis (iPods, iPhones, iPads, and Macs) are all made from aluminum.

Don't you think that's a little bit of a departure?

 

[Carniphage]

Its not like an aluminum housing is some futuristic material that will offer 500 dollars per device of savings to apple to manufacture.

It doesn't have to.
It just has to be cheaper to make than an iPhone4S.

 

[Grolubao]

The BMW 135, 335, 435, and 535 all run off the exact same engine too. Consumers understand the difference between each model, which run $10s of thousands apart not just hundreds.

Same goes for many other brands who have entry to luxury models of essentially the same product.

Sure, but BMW's are different sizes, which is something Apple is not offering. If it would be just for the finishes, would you really think people would spend thousands of dollars to have some chromes inside of the car? no way... it's mostly because of the size

 

[oneMadRssn]

no more 8GB apps are to big nowadays.

I don't think there's any way Apple releases this at 8gb. Also 16gb plastic IPhone should be $49 at most with contract.

8GB wouldn't be nearly enough for my habits, but it's plenty for someone who is new to the smartphone world and is basically going to use it like a dumbphone. It's enough to download every app on the appstore top 20 free apps list; with a few GB left for photos.

8GB would also be 'bad' enough to upsell someone who comes in looking for the cheapest iPhone to a higher 16GB or 32GB model, or perhaps to sign then up for an iCloud storage plan.

 

[Arran]

Its not like an aluminum housing is some futuristic material that will offer 500 dollars per device of savings to apple to manufacture.

No it won't. Tiny manufacturing cost savings are not what Apple's after here. Apple want to sell more iPhones, but the high consumer price is getting in the way. Hence the need for a lower priced iPhone to draw in price-sensitive customers.

Simultaneously, Apple must prevent downmarket defections to the low-priced phone to protect margins. So the plastic phone will be conspicuously positioned as inferior. Naturally, MacRumors members like to be in front of things and it seems like that positioning process is already well underway here! Widely professed disdain for "cheap plastic" and "garish colors" spring to mind. )

Compared to the cheap iPhone, the aluminum model will be what economists call a Veblen good:

In economics, a Veblen good is a member of a group of commodities for which people's preference for buying them increases as their price increases (as greater price confers greater status) instead of decreasing according to the law of demand.

 

[Chupa Chupa]

Sure, but BMW's are different sizes, which is something Apple is not offering. If it would be just for the finishes, would you really think people would spend thousands of dollars to have some chromes inside of the car? no way... it's mostly because of the size

The 335i sedan ranges from $43K to over $60K, and that IS just options and trim material, so yes. In fact there is an elite BMW Individual program where a buyer can select exclusive leather, trim, and paint for an extra $5-7K.

I think you took my analogy too literally. My point is that each BMW series offers something different to consumers even though it may share the same engine. In the same way the entry level iPhone and Flagship iPhone might share the same processor but each will have it's own feature set and look and feel. Consumers will be able to figure out just fine which iPhone is best for them.

 

[somethingelsefl]

I guess the question is do they keep the iPodTouch in the line up as that was kind of the old product split.

I also wonder, given all the talk late last year of ARM SoC embedding wifi, bluetooth & 3G HSPA+ within the chip for a single chip solution, if Apple has managed to license a library they could use in the A7?

if so the iPhoneLite is really an iPodTouchPhone while the same chip would have cost saving in the iPhone and iPad lines.

I could see line up after next update as outright non-contract pricing
iPodTouch (A6) 32Gb $249
iPodTouch (A6) 128Gb $399

iPhoneLite3G (A7) 16Gb $349
iPhoneLite3G (A7) 32Gb $449

iPhone5s (A7+LTE) 32Gb $699
iPhone5S (A7+LTE) 64Gb $799

That actually makes sense. The new iPhone would definitely fill a price gap if it's priced like that.

 

[TallManNY]

I think this will be the pricing structure:

$400 or free on contract: iPhone color 16GB
$500 or $100 on contract: iPhone color 32GB
$650 or $200 on contract: iPhone 5S 32GB

Etc.

Google sells Nexus 4 8GB for $299, and it has no official LTE. I can't see Apple selling an LTE handset with twice the base storage for this price, but who knows for sure?


Sent from my iPhone using Tapatalk 2

I like that choice of pushing folks to buying the more expensive 32 GB. Especially if the rumors of supply constraints are true. And since that's the size phone I would buy anyway.

 

[GoldenJoe]

Depending on the time allowed I think it is completely realistic. Six months should be more than enough time I would think.

What I mean is, I doubt Apple would want to cut the number of apps they can claim by 7/8. But oh, what an interesting development that would be!

 

[AaronTheYoung]

It would be nice if there was a time limit for developers to adopt the new screen resolutions and once they reach that date their app gets pulled from the app store if they haven't implemented the new resolution. That is a good incentive to keep your apps updated from a developers standpoint.

I don't imagine this will generate any "good will" with the developers! Developers make Apple money (and vice-versa of course), but any good developer is going to take advantage of any new resolution -- don't you think? There is no reason to "force" them to do anything.

 

[Michael Scrip]

Might this be a yield issue? It could be hard for Apple to make a profit selling the iPhone 5 for $99 along with the 5S the next model year. The iPhone 5 case is hard to make.

If the 5S is the top iPhone model then having the plastic ones as the less expensive alternatives with iPhone 5 guts allows Apple to make more profit per phone.

Correction... Apple will be selling the iPhone 5 for $549 next model year.

Don't get caught up in the subsidized pricing. Apple still gets the full retail price for each iPhone.

Just want to clear that up... Apple does not sell phones for $99

 

[Michael Scrip]

8GB wouldn't be nearly enough for my habits, but it's plenty for someone who is new to the smartphone world and is basically going to use it like a dumbphone. It's enough to download every app on the appstore top 20 free apps list; with a few GB left for photos.

8GB would also be 'bad' enough to upsell someone who comes in looking for the cheapest iPhone to a higher 16GB or 32GB model, or perhaps to sign then up for an iCloud storage plan.

Agreed. I know plenty of people who do not save GBs of stuff on their phone. They just use it for normal phone stuff (voice/text/photos) and Candy Crush

And isn't 8GB already the entry-level size right now? I don't see anything wrong with that.

There are two ways to look at it:

On Apple's side - Flash memory is cheap... Apple could certainly afford to put 16Gb in the entry-level phone.

On the consumer's side - If 8GB isn't enough... just pony up an extra $100 to double the storage space.

My thought is: if you're buying the cheapest iPhone... you shouldn't expect it to come with all the bells and whistles.

 

[ValSalva]

Correction... Apple will be selling the iPhone 5 for $549 next model year.

Don't get caught up in the subsidized pricing. Apple still gets the full retail price for each iPhone.

Just want to clear that up... Apple does not sell phones for $99

True, you are right. But even at $100 less the hit on profit with the difficult to assemble iPhone 5 may not be something Apple is willing to absorb.

 

[Pompiliu]

Still having a hard time seeing how Apple will distinguish the two to consumers, besides camera and screen quality. They both will have to run the same iOS so the processing speed shouldn't be too far off...

- cheap plastic
- thicker than the real iPhone
- half the ram in the cheap one
- downclocked or last year soc
- crap cameras
- wireless n instead of ac
- some software feature not supported
etc.

The screen will most likely be the same (at least quality wise).

 

[IJ Reilly]

I don't know that anyone really ever cared that much. However, I have found that in the age of the anonymous internet everyone is a critic (including me). It is very easy to point fingers and judge when there is no recourse. I don't think personal writing style necessarily equals poor writing/grammar. They wanted to add emphasis and decided to do that with the word 'however'. Not right, not wrong, just his/her decision.

2 cents

Sure they did. Newspapers and magazines still employ copy editors (though in reduced numbers) to catch grammatical errors, and to enforce a publication's style guidelines. The difference between professional writing and the other kind isn't merely theoretical. The "recourse" is to care enough to hire writers with a working knowledge of grammar, to maintain style guidelines, and employ a copy editor to correct errors -- if not before they are published, then at least afterwards. This is how a publication looks professional.

Incidentally, inserting the word "however" in this instance doesn't add emphasis, but more nearly subtracts it. The usage isn't "wrong" per se, but it serves only to chop up the thought. In active writing (e.g., journalism), these are things to avoid.

 

[Gluben]

Why would there be confusion about iOS? Currently, iPhone 4, 4s, and 5 all run iOS 6. In September, all of them, and the 5s, will run iOS 7.

Apple has never sold a device with an older verison of iOS.

Not so much confusion about iOS, more between hardware and software. I think Apple (and I) like the idea of not calling hardware versions by number - just call them "iPhone" or "iPhone mini". Software can keep being called by version number.

 

[elev8d]

Agreed. I know plenty of people who do not save GBs of stuff on their phone. They just use it for normal phone stuff (voice/text/photos) and Candy Crush

And isn't 8GB already the entry-level size right now? I don't see anything wrong with that.

There are two ways to look at it:

On Apple's side - Flash memory is cheap... Apple could certainly afford to put 16Gb in the entry-level phone.

On the consumer's side - If 8GB isn't enough... just pony up an extra $100 to double the storage space.

My thought is: if you're buying the cheapest iPhone... you shouldn't expect it to come with all the bells and whistles.

I want 64GB, so I don't have to keep going back and deleting photos and videos. Also, there has gotta be a way to have apps store their photos in a folder separate from the photo app. It would be great if there were designated folders based on where the image is from... safari, camera, whatapp, etc, as opposed to me going back into photos after the fact to organize my photos into folders.

 

[Michael Scrip]

True, you are right. But even at $100 less the hit on profit with the difficult to assemble iPhone 5 may not be something Apple is willing to absorb.

Maybe the profit from the newer iPhone 5S will offset the hit on profit from the iPhone 5.

They're still using the same difficult manufacturing process for the 5S, right?

I just find it hard to believe that they would choose a manufacturing process where a $100 difference is make-or-break.

They knew going into it that they keep the same design for 2 or more years.