Apple's Lower-Cost iPhone As a 'Mid-End' Device

[Internaut]

Not sure if I should jump at the 16GB Nexus 4 for $360, or wait for this rumored low-cost iPhone. I prefer my phone contract-free, and if they can hit the $400 or lower price point then I'm in.

The Nexus 4 is fairly unique as phones go, being both more or less high end but also sold close to cost. That makes it pretty much unbeatable value for an off contract phone. I guess it depends on what premium you place on the overall Apple experience.

 

[AgentElliot007]

I do think Apple is making a new low-cost iPhone, but I'm guessing they're doing so to replace the 4S this upcoming cycle at the $0.00 on contract phone.

Why?

16:9 screen on all new iPhone devices.

Makes little sense to keep selling a phone with an aspect ratio that's different from where things are going. Get everyone on the same page. The plastic casing will be to bring down costs if they use it to balance out the more expensive screen, but it'll likely have very similar to the same guts of the 4S.

 

[AppleMark]

I don't get it.

Yes a crappier (cheaper) phone will boost sales. But its not like Apple need it.

How so? So when Apple release their quarterly figures and growth and profits are not what is expected or predicted what happens..?

Their share stock takes a hit. So this being the case, do you still really think they do not need to expand the company?

Tell me when the real Apple is back.

Real or old Apple? This is the real Apple, like it or otherwise, it matters not to the shareholders...

The old Apple is dead. Sadly along with their philosophy of backward compatibility [within reason] and their old focus on the customer and professional users.

 

[TouchMint.com]

I can see this doing pretty well anywhere. I am guessing it wont be much of a change just a renamed and maybe larger 4s. They are pretty much doing the same thing right now with old models so I really dont see the big deal.

 

[Mikebike125]

I totally agree! I'm sick and tired of these big phone companies dangling these pretty devices in front of people, spending billions on advertising convincing them their lives are pointless without them, and then binding them up in a multi-year contract that they have no escape from.

Apple should just sell all their products without any carrier. Screw the phone companies!

I agree. Last Christmas I wanted to buy 3 iphones and didn't have a problem with the "subsidized" price, it was the contract that was unbelieveable. 3 phones with a data pack was going to cost $285/ month which is nuts. I then wanted to see how much just buying the phones would be without the plan and it was $1800+ No way! So I ended up getting a Samsung GS II and a Samsung Gal Proclaim. Kept my little flip phone and use the Walmart Straight talk plan for a total of $120 per month unlimited everything for three lines and I can stop at any time.

I really wish I had iPhones because they would work with my mac but there is something to say about $120/month versus $285/month for TWO YEARS!

I love Apple (and own Apple stock) but I just can't go for that, no can do. (Hall and Oates)

 

[4TheLoveOfTech]

I can see this doing pretty well anywhere. I am guessing it wont be much of a change just a renamed and maybe larger 4s. They are pretty much doing the same thing right now with old models so I really dont see the big deal.

Those phones come with a contract. They are being subsidized by the carrier.

The analysts are saying Apple needs a Low Cost Off Contract phone.

There is a big difference in a country where you have to pay full cost for the phone.

 

[CausticPuppy]

Go low, sell at cost. Claim the whole market. Recover the money from iTunes sales.

An iPhone in every pocket!

That's essentially Amazon's strategy with the Kindle Fire (except for the "claim the whole market" part). They're not selling you a tablet, they're selling you an electronic shopping cart.

 

[bliggs]

So I guess buying an iPhone 4 for $450 is not considered as a cheaper phone?

 

[AppleMark]

nice.. Europe will enjoy the new cheap iPhone

That would be nice but no.... Europe is not classified as an emerging market.

Emerging markets are referred to as economies such as, but not exclusive to -

China, India, Russia, Brazil, Mexico, Indonesia, and Turkey.

 

[crackbookpro]

I'd kind of always assumed this.

Apple's "low end" Mac (the Mini) still costs more than most Dells. Their "low end" laptop (the Air) is certainly no netbook. The iPad Mini is certainly cheaper but it's no $199 Android-competitor. I expect the "low end" phone to be something similar.

The big question...will they keep selling the old phone as a cheaper alternative? Or maybe just last year's instead of the last 2 years? That's the part that will dictate where this new "cheaper" phone falls in the lineup.

** (All this is assuming it's for sale everywhere. If it's being made ONLY for emerging markets, all bets are off.)

You couldn't be more spot on... the question that is interesting is - what does Apple does with older phone now? Is last year's iPhone better than the new "low-end"? I think this is what is going to be interesting... How they market the pros/cons or features,functions,benefits of the new polycarbonate iPhone.

Apple does Product Differentiation so well, but they primarily do this through marketing strategy more than anything else. It will definitely be interesting to see the adverts & the marketing involved with the new low end phone vs the iPhones past generations.

 

[b0fh]

For me, it isn't the cost of the device that is prohibitive - it is the recurring cost of the voice/text/data plan. A typical "individual" plan runs about $75 a month these days. I'm obviously in the minority, but I think that's crazy. I'd be happy to pay, say, $35 a month for a limited voice/no text/2GB data plan, but no one is currently offering that.

Uh, you know that TMobile has a $30/month prepaid plan - 100 minutes voice, unlimited text and data (up to 5GB I believe)...

 

[thejadedmonkey]

I'd kind of always assumed this.

Apple's "low end" Mac (the Mini) still costs more than most Dells. Their "low end" laptop (the Air) is certainly no netbook. The iPad Mini is certainly cheaper but it's no $199 Android-competitor. I expect the "low end" phone to be something similar.

The big question...will they keep selling the old phone as a cheaper alternative? Or maybe just last year's instead of the last 2 years? That's the part that will dictate where this new "cheaper" phone falls in the lineup.

** (All this is assuming it's for sale everywhere. If it's being made ONLY for emerging markets, all bets are off.)

The thing is, Nokia sells low to mid-end smartphones for $200, which means that this thing has to fall into the $250, $300 range, assuming Apple charges up to a $100 Apple tax.

 

[absurdamerica]

That would only work if there was no way but iTunes to get stuff for your phone. No netflix, no blockbuster, amazon, hulu etc. Or they could force a cut from all users that have it on their iphone. Otherwise folks could and likely would use whatever they want and they wouldn't recover any money from them.

That's already what Andriod is doing, and they're leaving tons of cash on the table to do it.

Did you see iTunes revenues last year? They aren't going to make up the difference, and having multiple revenue streams protects you from having all your eggs in one basket.

 

[champ01]

So now it's not abut what Apple are, it's just what you care about?

Those products were aimed to be low-cost products. This is no exception.

The Mac Mini was not. It was designed because most people don't need a Mac Pro.

The iPod before Touch was just a crappy MP3 player and still is.

 

[Thunderhawks]

I need to stop posting on MR & get out more

They should let Cheech and Chong be analysts.

Same info, just very laid back!

 

[lowbatteries]

For me, it isn't the cost of the device that is prohibitive - it is the recurring cost of the voice/text/data plan. A typical "individual" plan runs about $75 a month these days. I'm obviously in the minority, but I think that's crazy. I'd be happy to pay, say, $35 a month for a limited voice/no text/2GB data plan, but no one is currently offering that.

So, I have a pre-paid voice plan with T-Mobile that costs me 10 cents per minute (which, for me, translates to about $6 a month) and a $30 T-Mobile data plan with a wi-fi hotspot. I use my feature phone for voice calls and my laptop/iPod Touch/iPad with the hotspot for everything else.

Straight Talk offers an iPhone plan with unlimited everything for $45/mo (running on Verizon's network).

 

[Liquorpuki]

The Mac Mini was not. It was designed because most people don't need a Mac Pro.

The iPod before Touch was just a crappy MP3 player and still is.

Mac Mini is a low end device that doesn't even come with a monitor. It's made for people that want small form factor desktops. People that don't need Mac Pros tend to buy iMacs, not Mac Minis

The iPod Shuffle was a budget device but it wasn't crap. Athletes everywhere used it and it packed a lot of functionality into a tiny wearable clip.

And it makes sense for Apple to go after the budget phone market. It's an untapped revenue stream that's currently owned by Android. Google makes no money off people that can't afford to access the internet so they're not gonna fight them. All Apple's gonna have to do is compete against Samsung, a bunch of OEM's with no clout, and whitebox handset makers with zero branding. That market is Apple's for the taking

 

[Tiger8]

Go low, sell at cost. Claim the whole market. Recover the money from iTunes sales.

An iPhone in every pocket!

International market barely uses iTunes, especially in emerging markets

 

[k995]

450 is the current cost of the iphone 4

Is that being replaced by this "cheaper" version? I dont even know if thats an upgrade depending on looks and hardware .


And I doubt the market is as "empty" as said here . MSRP is quite different from street price, plenty of good phones around 4-500 these days.

Apple would need to significantly undercut that lets say 3-350 to really be able to tap that cheap market .

 

[Velli]

Exactly. I don't get it, what is it that these analysts think a new, "low-end" (=midrange) iPhone will do better in the market than selling older models at midrange prices? I can't think of anything that Apple could reasonably put into a low-end device, that would make it stand out from an iPhone 4(S), while not come too close to the iPhone 5(S). It's weird how everyone raves about a lower-end iPhone, when Apple already has two of them.

 

[Shanpdx]

So I guess buying an iPhone 4 for $450 is not considered as a cheaper phone?

not with the specs; also remember it would not get (iOS) supported pretty soon. may be at the maximum 12 to 18 months.

 

[AppliedMicro]

Bought a iPod Touch when it came out because it was more then a crappy mp3 player.

So you obviously took a liking to a lower-quality / entry-level / budget version of the iPhone there. Not that there's anything wrong with that. But that's exactly what the iPod touch has been: It has always been a cheaper and "crappier" variant of the iPhone - and it still is.

The iPod before Touch was just a crappy MP3 player and still is.

When the iPod touch came out, it looked like an iPhone, it worked like an iPhone, it ran the same OS as the iPhone and the same apps as the iPhone.

Cause what Apple did the iPod touch, was simply that: they took an iPhone, removed the cellular/GPS wireless and sold it at a cheaper price - with cheaper & lower-quality display, camera, CPU, lower-capacity battery (due to lesser power draw) etc… In this regard, the iPod touch is a prime example of Apple penetrating the market with a lower-cost, budget product.

And the touch certainly wasn't released when/because "most people didn't need a mobile phone".

 

[marksman]

This is so stupid. It's like, "People are not buying a lot of phones in the $425-450 price range. Therefor, there's a great untapped market of people with $425-450 in their pocket who want to buy phones at that price range! DEPLOY THE CHEAP iPHONE!!!"

Maybe I'm eager to mock this stuff because I still can't see myself buying in to the smartphone craze any time in the near future and would much rather listen to some real mac rumors about the new Mac Pro or something instead of all these iToys. But even then, I still think the attempt at logic is pretty poor here.

Smartphone craze? Mcfly here is a hover board for you.

 

[caddisfly]

If the iPad mini had a phone on it, then it would be all I need. I could use iPhone ear buds or a blutooth device. I have read that you can use skype or other apps to make phone calls with the mini but I would like a dedicated phone number. I would also like data plans to be cheaper.

you can have a dedicated number with Skype and call regular phone numbers unlimited in country...can get both for about $60 per yr

 

[marksman]

You have no idea what you're talking about. Cook is not an accountant or finance guy. He got his bachelors in industrial engineering. He's a supply chain expert. You must have him confused with somebody else.

Skunk could not spell Cook if you spotted him the C and the K