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

[Michael Scrip]

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

But if they put better specs in a lower-end phone... it's no longer a lower-end phone.

If the iPhone 4 had the 4S processor in it... it would be the 4S.

I know, I know... there were other improvements... but you get my point.

So let's say Apple adds a $350 model to go along with the current $450, $550 and $650 lineup.

Would they need four different processors? Four different camera assemblies? Otherwise it will be difficult to differentiate the models by specs.

If Apple's plan of "selling the older models cheaper" goes away... will they have to come up with four new phones every year?

 

[Velli]

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

But a lower-end iPhone (obviously) wouldn't have the same specs as a high-end one either. I still fail to see what Apple would take out, that would leave a product that leaves it inferior and cheaper to manufacture than an iPhone 5, yet superior to an iPhone 4 (which at the time would be 5S vs 4S). A cheaper version would have to use an older CPU anyway, so the limitations would still be there.

Of course in theory they could take the same electronics and put it in a cheaper wrapping, but I don't think anyone sane actually expects that to happen.

The only thing I see making sense is to introduce a 5S or even wait for the 6, and then introduce a 5 with a plastic back cover (which would be less intrusive than to do it on the 4 - which COULD be one argument why they went with that design for the 5 in the first place). It doesn't make sense to design a completely new, but cheap model instead of just using the older versions, much of the cost of a new device is development, so it makes more sense to lower the price of former high-end models. But you could change the back cover to something cheaper without much need of re-development.

 

[rjlawrencejr]

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.

Read what a few posters said prior: the current metal and glass 4 and 4S are not significantly less expensive to produce than they were two and three years ago, yet their retail price has shrunk significantly. A lower cost to produce 4/4S replacement would allow Apple to recoup some of that lost margin as well as give the impression of releasing new product.

 

[Bregalad]

Skype offers a service where you get a phone number others can call you on: http://www.skype.com/en/features/online-number/

You could easily drop your cell contract, get a skype number and then use your iPad mini is a super-large phablet. Cheaper too, I'd guess.

EDIT: ThunderSkunk beat me to it.

That's a good idea with one fatal flaw: an iPad mini doesn't fit in my pocket.

It's not much use as a mobile phone if it's sitting at home on the arm of the couch.

 

[marksman]

could be because the mid-market is where the growth will likely occur in the upcoming years. That is, the higher end market growth is slowing.

I think I read that around 48% of iPhones sold last quarter was the latest version, vs 73% the previous year, meaning that there is growing domestic demand for the mid-market device (iPhone 4/4S, at this time). I'm sure they've done alot more research, but they prob found alot of people switching from feature phones want to pay $0 (subsidized) for a latest model.

In China, India, etc, it's wide open still, it's where the real huge growth is happening (on all markets). But it probably makes the more sense to get the 'mid-market' before trying to market a low-end device.

.

I agree that the zero price point in established markets is part of the goal. What this will do is create more profit for the carriers pushing these phones because they are going to end up costing carriers less even when fully subsidized.

With more profit, carriers will push the mid range devices. Unfortunately this will not likely make the phones cheaper for established market users but it will make them at least appealing to a wider spread audience in emerging markets.

A lot will depend on how much different it is from the flagship line too. If it is a fully capable device with a Samsung exterior it would do very well in most markets. If additional cuts are needed that endanger os and app upgrades that would be less appealing. If it doesn't stay close then there is no point as the step down of three generation devices works now.

 

[Kar98]

Is "mid-range" the word you're looking for? Because "mid-end" doesn't make any sense.

 

[BobbyCat]

Well, if 350-400 is what they call a "low-cost phone", it sounds quite a lot to me for that purpose. I don't believe this market prediction is reliable, even with a seemingly convincing graph .

Since you need to spend more money every month in order to use it, it remains a smartphone, i.e. a smart way for phone makers and phone companies to make the customer spend more than with a classic phone. People know that. Therefore, I don't see this "cheap" phone becoming a success at such a price. But around 200-250, it could be a hit, even without all the bells and whistles of the iPhone 5 or the Samsung 4.

My 2 cents.

 

[Sedrick]

Apple already has the 'mid' end covered with previous year's models.

 

[Fishticks]

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]
Apple's rumored lower-cost iPhone will still be a "mid-end" device rather than competing against the true low end of the smartphone market

To be precise, Apple will never release a low cost product: they will release a "mid-cost" product.
However they will surely release a "low feature" product at "mid-cost" , i.e. a well advertised overpriced and underfeatured product.
This will sell very well and make good margins.

 

[sagnier]

Is "mid-range" the word you're looking for? Because "mid-end" doesn't make any sense.

if it makes no sense how come you know 'mid-range' is what they're looking for?

Ha! got you.

Of course it makes sense. It's a lovely new word. Thanks, analysts - turns out you're good for something after all.

It'll stick too. It already sounds 'wordy'. Unlike 'jailbreaked', which with its air of conjugation had a hard time gaining currency. I'm still rooting for it though!

 

[PracticalMac]

I recall the PowerBook 2400 was meant only for Japan, but was so popular it was quickly imported and sold to US.

 

[TouchMint.com]

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.

I hear you I buy my phones off contract (the iphone 5). Realistically an iPhone 4s costs what $500 off contract and an iPhone 4 costs $400 off contract.

 

[Rocketman]

I agree this device is targeted at prepaid foreign markets primarily. After a wide foreign rollout and saturation, we may see Apple offer the device in domestic and traditionally postpaid markets to delay cannibalization. The justification will be "extraordinary demand" in traditionally prepaid markets.

There is a legit need for an iPhone at this price point and whatever Apple does to differentiate it from its flagship product (memory, casing, display, sensors) will be insignificant as compared to access to the ecosystem.

The actual challenge to adoption will be data access costs, not device price.

Rocketman

 

[einmusiker]

if true this will be a bad move by apple. it will sell but not nearly as well as they hope

 

[Xiroteus]

That's a good idea with one fatal flaw: an iPad mini doesn't fit in my pocket.

It's not much use as a mobile phone if it's sitting at home on the arm of the couch.

I wonder if it would fit in cargo pants.

 

[Speedy Gonzalez]

iCheap....

 

[santos79]

pointless, i can get an iPhone 5 for 1€ on a 29€ plan...

Link?

 

[Shanpdx]

But if they put better specs in a lower-end phone... it's no longer a lower-end phone.

If the iPhone 4 had the 4S processor in it... it would be the 4S.

The problem really is with size of the screen,iPhone 4S at 3.5" where everyone else is ramping up 1080p screen on 5" size

The only thing I see making sense is to introduce a 5S or even wait for the 6, and then introduce a 5 with a plastic back cover (which would be less intrusive than to do it on the 4 - which COULD be one argument why they went with that design for the 5 in the first place). It doesn't make sense to design a completely new, but cheap model instead of just using the older versions, much of the cost of a new device is development, so it makes more sense to lower the price of former high-end models. But you could change the back cover to something cheaper without much need of re-development.

They cannot wait that longer; next iPhone release should bring refresh in strategy.

remember Verizon iPhone 5 is unlocked, there will be lots of people will be dumping the iPhone 5 on t-mobile for cheaper than $550 (once iPhone 5S released).

also remember what happened with iPod touch market, with the second hand market floating, apple really needed up the specs and reduce the price.

 

[h4ck]

right, because apple cares about what the "market" is doing, and competing price points.

 

[Shanpdx]

right, because apple cares about what the "market" is doing, and competing price points.

sometimes they do care and sometimes they do not.

Looks at the iPad mini (and their pricing structure after nexus 7 came out). there is a correlation even if apple not worried about nexus 7 completely.

 

[andrebismara]

Guys stop whining! I live in Brazil and we can buy unlocked 4S here for about 1000 dollars, or else buy with 0 dollars upfront and get stuck in a 2 year contract for about 110 dollars a month! and yet I see lots of iphones everywhere! Even the 5, which wasn't release officially here, I see, and this is about 1300 dollars the 16 giga version unlocked!

Makes me wonder if I really live in an emerging country with those prices. And I also have for 1 year a 4S unlocked.

All in all I would gladly pay 350 dollars or even 400 dollars even for an iPhone 4, it would be a bargain here!

 

[lollicup04]

What about the premium build that Apple users have been touting about. When other manufacturers use polycarbonate materials its a POS but when Apple does it it is revolutionary and magical?

 

[Toltepeceno]

either I did not understand the article or you don't know what emerging markets are.

One for sure - Europe isn't.

Mexico is, I rarely see iphones. A lower cost one is a great idea for here.

The problem is that if it costs 400.00 in the US it will cost 600.00 us here.

 

[mrsir2009]

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

An iPhone in every pocket!

That's pretty much what Amazon does. It should work... As long as they don't get pushy - Pressuring people to buy things. That's be awful.

 

[nikaru]

Apple already has the 'mid' end covered with previous year's models.

Bit it has 3,5 inch screen and developers must remake their apps. Apple wants to go to 4 inch on every app, so they will discontinue the 4 and 4S and introduce similar phone but with 4inch screen.