More Claims of Apple Using Qualcomm's Snapdragon Chips for Lower-Cost iPhone

[Tiger8]

What would be the difference between a low-tech new iPhone and an old iPhone?

One is new the other is old.

Mercedes Benz introduced the C class as a lower cost alternative to its E class

BMW introduced the 1 series as a lower cost alternative to its 3 series

Yes you can get an older E or 3 for the same money as a new C or 1, but people seem to old for the newer cheaper model.

 

[notthedark]

Everyone seems to be focused on "first-world" customers with regard to a low cost iPhone. Apple already has the "first-wold" market. #firstworldproblems

A low cost phone would not be for "us." In order to expand the sales base for iOS products Apple needs to expand in to territories where average yearly incomes may be no more than a couple of months income in a rich countries and to territories where phone subsidies do not exist.

Even at $99 Apple would have a very hard time securing sufficient profit potential to warrant entering a market where someone's entire month's income is $600.

When an entire adult family lives under one roof, just to pay for that roof, they don't often concern themselves with the preciousness of the "white" iPhone.

 

[deconstruct60]

But many people desire the latest and greatest..

A much far larger group desire the more affordable. In the pre-paid market in countries where the disposable income is much lower a $450 phone is unaffordable.

These folks are looking for "good enough". Not an object to brag about the specs.

In the Quarterly meeting Cook said that Apple was "surprised" how well the iPhone 4 is doing. I think they realize they have releaized that they have it the "good enough for large groups" stage in shrinking the size and the basic capabilities. Shrinking and spec over that isn't buying a substantially larger group of customers. The iPhone is responding to basic supply/demand curve dynamics now where more affordable leads to much higher buying volumes.

 

[8281]

There's already a lower-cost iPhone. It's called the iPhone 4S.

There's an even cheaper option. It's called iPhone 4.

These claims are Page 2 garbage. Stop feeding the troll analysts.

I don't why you are so threatened by a low cost iPhone. People don't want to spend money on a 1.5 year old phone when they could buy a new one for the same price. Think Different

 

[Tankmaze]

it's a bit snob is it, that using qualcomm's snapdragon chip for the low cost iPhone while all of the android phones use it.

and the flagship iphone will use the A series chip.

it's just that maybe the Ax chip from apple really do cost a lot for them, or maybe just a marketing gimmick to separate the phones.

 

[adamryan1983]

There's already a lower-cost iPhone. It's called the iPhone 4S.

There's an even cheaper option. It's called iPhone 4.

Exactly! We don't need a mediocre version of the iPhone 5. If people cannot afford it, buy older technology. It's the same way with cars. If you cannot afford a brand new one, look at buying last years model or a used one, not the current model with a half assed engine and only 3 out of 5 gears on the transmission to make it cheaper.

 

[paradox00]

What would be the difference between a low-tech new iPhone and an old iPhone?

Case materials and screen resolution. Even three year old iPhones use premium casing materials and production processes that only come down in cost so far. Aple could save money by going back to non retina resolution and making slightly thicker injection molded plastic cases.

There isn't really a cost saving in continuing to mass produce 3 year old processor chips, if they are also producing new chips and 2 year old chips. You get the most savings with the one generation old chips. After that, you're just keeping an extra chip production line open. I doubt Apple really wants to keep more than two running in the long term. A high performance one and a low cost one is all they need. Obviously less of an issue if they use Qualcomm chips that they are still selling to other vendors, but I find that unlikely. So a low cost iPhone could also offer better performance than a 3 year old iPhone as well. On top of that, it wouldn't have the stigma of being a 3 year old iPhone. A low cost iPhone makes a ton of sense if you actually think about it.

 

[whooleytoo]

Uh...that's why they are cheap.

What's more expense Apple to completely design a new lost-cost iPhone from scratch, get new machines, research materials OR have Apple sell an iPhone 4 at a reduced price?

I still don't get how a new low-cost iPhone (that will have a slower processor and only 3G) would be cheaper than the already mass-produced iPhone 4. But then again, I'm not an analyst.

It depends on the cost of the components; and the price-point Apple want to reach; and how much they're worried about a potential low-cost iPhone cannibalising iPhone sales.

They might want to hit a low price point that wouldn't be possible using iPhone 4/4S components while still keeping the healthy margins Apple loves. Or perhaps they worry a cheaper iPhone 4 would destroy iPhone 5 sales, so they're going with a very low spec to differentiate them more.

Or, this is all blind guesswork on all our parts.

 

[paradox00]

Exactly! We don't need a mediocre version of the iPhone 5. If people cannot afford it, buy older technology. It's the same way with cars. If you cannot afford a brand new one, look at buying last years model or a used one, not the current model with a half assed engine and only 3 out of 5 gears on the transmission to make it cheaper.

Terrible analogy. All manufacturers offer new cars at a variety of price points.

 

[FSMBP]

It depends on the cost of the components; and the price-point Apple want to reach; and how much they're worried about a potential low-cost iPhone cannibalising iPhone sales.

They might want to hit a low price point that wouldn't be possible using iPhone 4/4S components while still keeping the healthy margins Apple loves. Or perhaps they worry a cheaper iPhone 4 would destroy iPhone 5 sales, so they're going with a very low spec to differentiate them more.

Or, this is all blind guesswork on all our parts.

I see what you mean but they lose economies of scale by making a new low-cost iPhone. With that, they have slimmer margins.

Each iPhone has a fixed cost (research/machines), it seems like it would be more costly to constantly introduce new low-cost models as opposed to riding out last-year's flagship.

But we'll find out in August!

 

[mdelvecchio]

The problem is that Apple can't keep playing this game forever. The iPhone 5 is harder to manufacture. The physical tolerances are getting to the limits of what workers can do at extremely high volumes. The never ending quest for thinner and harder to make is at fundamental conflict with larger production volumes.

what rubbish. wanna know why? todays tech gear was "impossibly hard" to manufacture 15 years ago. and the gear from 1998 was impossibly hard to manufacture in 1983. and that gear in '68, and... etc. the point -- like all tech, manufacturing ability improves. this is the foundation of which all electrical engineering sits.

Apple needs a product that is designed from the start to be made at the volumes they will need to grow. The are starting to high the law of large numbers. It is going to be harder and harder to grow at double digit rates at the price points that they are at.

price point is an entirely different matter than ability to manufacturer.

 

[XtraSmiley]

it's a bit snob is it, that using qualcomm's snapdragon chip for the low cost iPhone while all of the android phones use it.

and the flagship iphone will use the A series chip.

it's just that maybe the Ax chip from apple really do cost a lot for them, or maybe just a marketing gimmick to separate the phones.

I'm not sure the average phone buyer knows nor cares what is actually inside the phone, us fans on the other hand...

 

[2bikes]

Exactly! We don't need a mediocre version of the iPhone 5. If people cannot afford it, buy older technology. It's the same way with cars. If you cannot afford a brand new one, look at buying last years model or a used one, not the current model with a half assed engine and only 3 out of 5 gears on the transmission to make it cheaper.

Not a good POV. There are several versions of Macs offered at different price points. And their specs are bumped all together. They are not selling the iMac from 2 years ago as a cheaper version, where the OS and software support is the same for all.

 

[XboxMySocks]

now cites an unnamed source making the same claim. The report says that TSMC has been contracted to produce the Snapdragon chip using its 28-nanometer process.

In analyst speak, "we made it up."

 

[Dorfdad]

This is a stupid thing for Apple to do in the US market. I could understand if this was for other countries, but even than they would have other options better than this gimped iPhone.

 

[JohnDoe98]

Some version of an "iMessage Voice" would be great--but I really doubt the carriers would allow such a device soon.

Isn't that just FaceTime with the video turned off?? Which, by the way, is allowed by most carriers.

 

[maxosx]

This rumor of an impending "cheaper iPhone" is very interesting.

As it gets more traction and becomes a reality it ought to be quite different from the usual Apple ego driven premium product.

No longer will Android haters be able to bash Samsung for "cheap phones" since Apples now racing frantically, playing catch up, to join them.

Apple's karma is not so good these days. Waffling stock, late to understand that they don't always know what's best as they claim. Apples in a position foreign to them.

2013 is not starting off too well for Apple Inc. But then again, the not too discerning public keep buying anything with the fruity logo... But for how long?

 

[TallManNY]

Take iPhone 4S, replace back with plastic, lower price by $150, cheaper iPhone is done and available for sale this Summer.

Yes, Apple can do this at any point it wants. Using Snapdragon processor would be silly and just a teeny bit of cost savings.

Wait until GS4 is released. Press is going to have field day with cheap plastic design. GS4 will be very good and sell very well, but Apple should just hold out and fight in the luxury market. The other premium Android handset sellers will struggle caught between the premium iPhone and the cheaper GS4. One more generation of lackluster profits and they will abandon the premium market and iPhone will only have the blackberry, Nokia and Sony remaining to compete against.

Even in Korea the iPhone is considered the status symbol phone to have. That is a very valuable thing and it will protect Apple's margins.

 

[whooleytoo]

I see what you mean but they lose economies of scale by making a new low-cost iPhone. With that, they have slimmer margins.

Each iPhone has a fixed cost (research/machines), it seems like it would be more costly to constantly introduce new low-cost models as opposed to riding out last-year's flagship.

But we'll find out in August!

Well, lower-spec should mean lower engineering costs. If they're going with existing, low power chips and no LTE, that should mean less pressure on thermals or power usage. Plus, as a low-cost device it's presumably a very high volume product, thus spreading the cost of design & tooling up across a very large number of devices.

As you say, we'll see..

 

[jmpnop]

There's already a lower-cost iPhone. It's called the iPhone 4S.

There's an even cheaper option. It's called iPhone 4.

These claims are Page 2 garbage. Stop feeding the troll analysts.

iPhone 4 8GB unlocked - $450

iPhone 4S 16GB unlocked - $550

How exactly $150-$200 more than competition (Nexus 4) for a 3-year old phone cheap?

 

[barkomatic]

Isn't that just FaceTime with the video turned off?? Which, by the way, is allowed by most carriers.

Well, perhaps we will get an "iMessage Voice", but just like regular iMessage the carriers *still* require a text messaging plan and in most cases an "unlimited text messaging plan that runs $20.

I think the assumption that just because we have voice and messaging apps that run over data connections that carriers will allow data only smartphones. I just don't think that's gonna happen soon. If carriers ever do allow it, then they will make sure your data bill will be $120 a month.

 

[carlgo]

What is a bigger factor, the cost of the phone or what you pay to the carriers?

 

[Dr McKay]

There's already a lower-cost iPhone. It's called the iPhone 4S.

There's an even cheaper option. It's called iPhone 4.

These claims are Page 2 garbage. Stop feeding the troll analysts.

Checking Amazon, the iPhone 4 is roughly £300, ($450). iPhone 4S is going for roughly for £370, ($555).

I wouldn't call those cheap phones.

 

[Amazing Iceman]

Does the Snapdragon processor have the same instruction set as Apple's Ax chips?
If not, it could mean extra work for developers, having to compile apps for two different processors or combining both versions inside the one app, increasing the size of it. It would be a situation similar to the PowerPC/Intel compatible apps.

 

[ymmit]

Looks like less than 1/4 of the comments actually pertain to the chip. The rest are just the same 'cheap' argument over and over again.

I really don't see that Apple has much incentive to move away from their custom chips. The trend we've seen so far is that Apple is controlling more and more of the chip side of the devices. Why would they give up some of that control just for a cheap phone? Are they incapable of manufacturing their own low cost chip?