WSJ: Less Expensive iPhone Could Come as Soon as This Year

[powersnips]

MacBook Air

Geez - all we need is more of the unwashed masses using Apple products. What is this world coming to? I remember when owning Apple gear made you one of the elite. So sad to see what is happening.

I am one of the elite, on my 6th iphone (back to my 3Gs) all good until having three 4s phones die with in 90 days I had to refuse Telstra's offer of a fourth new one (opted out of the contract), but I blame it on my MacBook Air 256Gb i7, because when I backed up my 3Gs to it, the 3Gs received the same software problems that all the 4s phones suffered, I have to restore the 3Gs every 2 to 3 weeks. I bought the MBA new 15 months ago which I was ecstatic with it for three weeks then it over heated while in iMail and the email I was reading disappeared, then three weeks later it overheated to the extreme"arhuh" Iv'e Apple care! Now 13+ months later 100 Apple care calls 10 trips to the Apple store Jenuis? Bar "HA" They replaced the battery and many tests four erase and installs for it only to get worse, like going in to some sort of hibernation while in use and awakes when it feels like it, blinking screen, no iMail (have to use webmail) at least webmail does not attach of up to ten random company(private information) from sent emails, to the email that you are sending to another company. There are to many hiccups with it to post here. SO I AGREE WITH YOU MY TOUNG MUST BE UNWASHED, BECAUSE I HAVE A BITTER TASTE OF APPLE ON IT.

 

[JHankwitz]

In retail there are three key matrix:
1. Profitability (of course)
2. Volume (of course)
3. Market share

True, but only #1 really counts at the end of the day.

 

[powersnips]

Unwashed, ummm maybe taste

I am one of the elite, on my 6th iphone (back to my 3Gs) all good until having three 4s phones die with in 90 days I had to refuse Telstra's offer of a fourth new one (opted out of the contract), but I blame it on my MacBook Air 256Gb i7, because when I backed up my 3Gs to it, the 3Gs received the same software problems that all the 4s phones suffered, I have to restore the 3Gs every 2 to 3 weeks. I bought the MBA new 15 months ago which I was ecstatic with it for three weeks then it over heated while in iMail and the email I was reading disappeared, then three weeks later it overheated to the extreme"arhuh" Iv'e Apple care! Now 13+ months later 100 Apple care calls 10 trips to the Apple store Jenuis? Bar "HA" They replaced the battery and many tests four erase and installs for it only to get worse, like going in to some sort of hibernation while in use and awakes when it feels like it, blinking screen, no iMail (have to use webmail) at least webmail does not attach of up to ten random company(private information) from sent emails, to the email that you are sending to another company. There are to many hiccups with it to post here. SO I AGREE WITH YOU MY TOUNG MUST BE UNWASHED, BECAUSE I HAVE A BITTER TASTE OF APPLE ON IT.

 

[KdParker]

The "I'm a Mac" advertisements weren't about people or users. Justin Long didn't play a Mac user, he played a Mac - a computer. That compared himself to a standard PC - played by John Hodgman.

Apple was not making fun of PC users and portraying them as stodgy business types and Mac users as being cool. They were playing off the fact that Windows computers were mainly designed for IT departments and Macs for individuals.

The only reason anyone would be offended by this is if they were somewhat lacking in self-esteem.

Well said.

 

[JHankwitz]

Geez - all we need is more of the unwashed masses using Apple products. What is this world coming to? I remember when owning Apple gear made you one of the elite. So sad to see what is happening.

This reminds me of the Sports Car episode of Seinfeld. We all have personal perceptions.

 

[Tiger8]

True, but only #1 really counts at the end of the day.

profitability is key but also moving the biggest volume is also key (just ask Walmart or any of the club membership stores, who build their entire business almost exclusively on #2). Market share is also key because if you start loosing market share it means the beginning of the end.

I always thought diversification of iPhone is good for apple so I'm glad they are pursuing this.

 

[nuppieri]

a cheaper iphone would be perfect

I guess that's a great idea! If you have the money you can still buying the luxus version. If you don't, or you don't care, you can buy the cheaper one. BUT you will still needing or wanting to play an use your phone with apps, that's a gigantic market for developers... and for apple. because the key is the ecosystem not the devices; samsung or sony or google are now making very good devices, but until now nobody can reach the quality of the apple-ecosystem. the many apps we buy and make us staying with apple because is a fantastic product...

I could imagine me buying a cheaper second iphone when going on hollidays somewhere the iphone costs the same than a 3 or 4 months salary, and leaving my baby at home... at this time i use to take an old nokia potato at this situation... on many countries calling from a $700 device on the street can be a problem. Maybe not in USA or Europe, but the rich world is really small.

 

[dreadnort]

Oh no. What will some posters here be able to counter the crappy plastic Samsung, LG and other "crap" with if Apple makes a cheap version of their iPhone in PLASTIC?! Oh nozzzzzz

Samsung and LG use polycarbonate (why is it that only Elitist fanboys say there cheap)

Polycarbonate is a versatile, tough plastic used for a variety of applications, from bulletproof windows to compact disks (CDs). The main advantage of polycarbonate over other types of plastic is unbeatable strength combined with light weight. While acrylic is 17% stronger than glass, polycarbonate is nearly unbreakable. Bulletproof windows and enclosures as seen inside banks or at drive-throughs are often made of polycarbonate. Add to this the advantage that polycarbonate is just one-third the weight of acrylic, or one-sixth as heavy as glass, and the only drawback is that it is more expensive than either acrylic or glass

so by that above its not a cheap plastic phone, why shouldnt apple make a cheaper phone for the emerging markets their not making you buy one, stick with your current iphone and get then next most expensive iphone when its released.

 

[huffcw]

It's a response to market saturation

The smartphone market is quickly moving toward market saturation (particularly in the U.S. and parts of Europe). Many people who want a smartphone (and can afford the phone and monthly cost of the plan contract) already have one. It's not quite there yet, but it is coming quickly.

As the smartphone market reaches saturation, sales will not be able to keep pace with where they are at today. Apple can always continue to sell the latest iPhone model to current smartphone customers and try to convince users of other smartphone devices to switch, but the kind of sales expansion that has taken place to date will begin to dwindle.

Apple is likely looking for ways to keep the sales momentum going with a new product category -- expanding to people who would not buy the full iPhone (or could not afford the typical phone+contract plan monthly cost). This includes those in developing countries who typically purchase a phone at full cost (i.e., not subsidized by phone carrier).

However, while they will address a different part of the phone market, my guess is they will still do it in a way that is completely Apple -- that will uphold their overall brand and will avoid cannibalizing their other products as much as possible.

Apple has to have a forward-looking approach for products or they will not be able to sustain the growth they have been experiencing in recent years. Shareholders expect it -- and the health of their future business depends on it. They know market saturation is coming and need to be a step ahead of it.

 

[dmelgar]

Doesn't seem like a good idea to me. Will speak very negatively about the stock if true.

Apple did not get to where it is by flooding the market with every conceivable size and price point. It didnt get there by building a range of products from ok, better, best. As Tim cook loves to give lip service to, apple got here by building the best products and only the best in each of the few categories it chooses to compete.

If they've really run out of ideas for new products, then all they have left is to chase the Samsung business model and come out with 37 varieties of phones.

They should stick to making premium products and find new products consumers will want to buy and features that will differentiate them from the rest.

But that is much harder than simply adding more sizes and cheaper versions.

A cheaper iPhone will harm the brand image and hurt sales of all products more than the incremental add from a cheap iPhone.

I'll also repeat that apple giving out a dividend was a very dumb use of capital. They should be buying companies, revolutionizing some industry. But it seems that their vision is gone.

 

[Dranix]

Polycarbonate is a versatile, tough plastic used for a variety of applications, from bulletproof windows to compact disks (CDs). The main advantage of polycarbonate over other types of plastic is unbeatable strength combined with light weight. While acrylic is 17% stronger than glass, polycarbonate is nearly unbreakable. Bulletproof windows and enclosures as seen inside banks or at drive-throughs are often made of polycarbonate. Add to this the advantage that polycarbonate is just one-third the weight of acrylic, or one-sixth as heavy as glass, and the only drawback is that it is more expensive than either acrylic or glass

Polycarbonate is at first one thing: terrible easy to scratch at the surface.

 

[Compile 'em all]

I never get the hate for plastic, If its done right then it can be a fantastic material.

It feels cheap. How something feels is important to certain brands (especially luxury goods).

 

[Rogifan]

So Bloomberg says this device could go for $99 or $149. OK an 8GB iPhone 4 retails for $450 USD. If Apple is really doing something at those price points it's not going to be a cheaper version of the current iPhone. And I certainly don't see it being 5" or whatever. Seems to me at those price points it would be a basic feature phone with limited functionality. Would it even be full on iOS with the App Store or something like the iPod nano interface?

I'm a bit skeptical about the whole thing because Apple 2.0 has never been about competing at the low end to gain market share. I don't know how it helps their brand to start doing that now.

 

[jmerchlinsky]

About Time

Its about time. This is a recognition that there is no more room for growth with a $600 phone. Apple has been on an incredible growth curve that originated from the launch of the iPhone in the US, followed by Europe, then multiple US carriers, and then China. There simply aren't many markets left for such an expensive phone.

Not to mention that Samsung is eating their lunch at the low end. Which threatens the ubiquity of the ecosystem.

So the time has come (I feel its long overdo) for Apple to launch a phone targetted at the low end market. Not last years iPhone at a discount, but an honest-to-goodness optimization around a cheaper phone. Everything should be on the table, materials, memory size, processor, screen size and resolution, etc. This phone will be every bit as important to Apples future as the iPhone 6 iteration. And I'm betting the rumblings of moving processor Fabs to TSMC is as much about hitting the volumes and price point for the 3rd World iPhone as it is about anythign else.

This phone needs to optimize cost and durability over performance and jewel-like construction. I predict a higher level of integration (processor with memory and radio in one die for example), plastics and maybe the original iPhone resolution.

China is the primary (or at least initial) market for this phone, and its no coincidence that there rumors are coming back through reliable channels while Tim Cook is visiting China. This is why he is there. In fact, this is Tim Cook's moment to put his personal imprint on Apple. The reason he is CEO is that he has been the master of scaling phone production. All along the incredible iPhone growth curve the under appreciated element that has breated hundreds of billions of dopllars in Apple corporate value is the ability to double, and double, and double again production while maintaining quality. It is amazing what he has accomplished in the past. And this development is his opportunity to continue that incredible growth curve as the market for smart phones is pushed farther down the price curve opening the market to literally billions of people.

Stev Jobs invented the tranformational device of our generation, and Tim Cook will bring it to the masses.

Yes, for you investors, margins will be lower. But it's time for Tim to see if he can make it up in volume. : )

 

[mjtomlin]

You know - you're wrong to some degree in my opinion. Because (as you can see here) people identify with the products they use.

What do you mean? That some people use these products to convey their personality? That somehow this thing they bought is a window to their psyche?

Again, that's a self-esteem issue. Plain and simple.

I understand that people can become attached or infatuated with the things they own. That's fine. But anytime, anyone feels the need to defend their decision for having that product, then something is wrong. It's okay to want to defend the product itself, but if you personally start taking offense to the criticism, then you probably feel that you may not have made the right decision.

So when you talk about how dumb a phone is. Or how dumb a computer is. You're insulting the user of that device.

When I say I think Samsung makes crappy products, that's a personal opinion. It should not offend anyone except someone that works for Samsung. Anyone who owns a Galaxy SIII that takes offense to that obviously thinks so too - if they felt it wasn't crappy and it did what they needed, why would they be offended?

Apple's "I'm a Mac" commercials never once mentioned anything about PC users... everything was in reference to PCs running Windows. Of course the Mac was going to come off as being smug, Apple obviously felt that their computers were much better than standard run of the mill PCs. There was never anything malicious about them, the "PC" always came off as lovable and adorable, because John Hodgmen was so great at it. Apple wasn't out to offend anyone, just show them that the Mac is a good alternative to what they were already using.

Samsung's commercials, on the other hand, might as well as said, "iPhone users are dumb. We think they're so dumb, that by using peer pressure and insulting them, they'll want to switch to a Galaxy phone."

 

[dreadnort]

Polycarbonate is at first one thing: terrible easy to scratch at the surface.

Not as easy as Aluminium

 

[huffcw]

Apple knows market saturation is coming and needs to be a step ahead of it by expanding into other categories.

 

[Shearwater]

What to call such a phone??? It is such a departure from the iPhone range they couldn't just add a new number!

The only choices are between.......Appsung...or.....Sampple!!!

Let the lawyers sort that one..or two

 

[rendevouspoo]

Apple's "I'm a Mac" commercials never once mentioned anything about PC users... everything was in reference to PCs running Windows. Of course the Mac was going to come off as being smug, Apple obviously felt that their computers were much better than standard run of the mill PCs. There was never anything malicious about them, the "PC" always came off as lovable and adorable, because John Hodgmen was so great at it. Apple wasn't out to offend anyone, just show them that the Mac is a good alternative to what they were already using.

Samsung's commercials, on the other hand, might as well as said, "iPhone users are dumb. We think they're so dumb, that by using peer pressure and insulting them, they'll want to switch to a Galaxy phone."

This is incorrect. The "I'm A Mac" commercials portrayed the Apple user to be attractive and hip, while the PC was a fat slob. Samsung and Apple both made some immature commercials. Don't try to justify one, while glorifying the other. They are both the same.

 

[Ubele]

Hate to tell you but they ALREADY DID. It's called, iPad Mini.

I'd agree that the iPad Mini would "cheapen the brand" if it were simply a less expensive, more cheaply made, less powerful version of the iPad 4 (e.g., 8 GB of storage, plastic case, etc.) – which Apple could have done, but historically it's not the way they've done things. Instead, it's a different product, appealing to people who value a smaller size and lower weight over a Retina display. Yes, it uses a less-powerful processor than the iPad 4's A6, but because it lacks a Retina display, and because apps haven't caught up to take advantage of the A6, the user experience is pretty much the same, from what I've read. The only noticeable difference is the lack of the Retina display, which bothers some people, and not others.

That's why I'm skeptical that Apple would make a less-expensive, lower-specced version of the iPhone out of cheaper materials that's undistinguished in any way, especially since they still sell the iPhone 4 and 4S at lower prices. I think they'd find a way to make it seem just as cool and high quality in some other aspect, similar to how the iPod Nano wasn't simply a cheaper version of the standard iPod. Yes, it was and is less expensive, which appealed to people who had small music collections and less money, but its smaller size and flash storage as opposed to an HDD made it perfect to use while exercising.

But I could be wrong. Apple has been moving in an increasingly mass-consumer direction, and if they think that a less-expensive, more cheaply made iPhone would sell in the millions and not tarnish the brand, I'm sure they'll do it. Apple products are ultimately about the overall user experience, rather than individual specs.

And I suspect iGrip is quite amused by all the people who have taken his posts seriously.

 

[zorinlynx]

OH NO, all you poor, poor souls who are having your douchebag status threatened by the iPhone becoming affordable to everyone...Now you'll have to buy something else to retain your d-bag of the year awards...

Seriously, go walk off a freaking cliff. Everyone should be able to have nice things.

 

[GuitarDTO]

I wonder if this is somehow tied into the other article talking about how carrier subsidies may be coming to an end. Could it be that Apple is actually ahead of the game here and preparing for just such an event under the guise of selling them to 3rd world countries? (Which is no doubt true as well). If cell carrier subsidies do disappear, many people are not going to pay for a new $600 phone every other year. Sales will drop significantly unless prices also drop. Apple knows what they are doing.

 

[SmileyBlast!]

I'd choose a black polycarbonate iphone 5 any day over the current aluminum version, it just makes more sense. The stainless steel 4's were so much more scuff resistant than the current soft aluminum so just give me light weight quality plastic. It wouldn't chafe in the case any worse than what I have now. If it's cheaper, that's a plus as well.

What is the value of the Apple Brand? Billions!
What is the value of an average iPhone owner in the Apple ecosystem over 3 years?
Apple says they paid Devs $7 Billion from a customer base with 400 million credit cards on file in 2012. That averages $17.5 per user per year. $52.50 for 3 years.

I think copying the Android market model is not going to help Apple.
Android owners don't pay for Apps.

It's better to win customers in India and China with this approach but they need to preserve their premium brand in the US, Europe and the rest of Asia.
Otherwise Apple will lose prestige, chic and future sales momentum due to a weakened brand.

There must be a correlation between being able to buy a premium phone and spending extra for Apps.
Wealthy people can afford to do this. They are also more likely to be Apple Customers.

Apple is better off making a premium product and making their profit up front off the phone and not try to make it up afterwards with after market sales in the ecosystem.

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Lol

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I could imagine me buying a cheaper second iphone when going on hollidays somewhere the iphone costs the same than a 3 or 4 months salary, and leaving my baby at home... at this time i use to take an old nokia potato at this situation... on many countries calling from a $700 device on the street can be a problem. Maybe not in USA or Europe, but the rich world is really small.

You make a good point about having a cheaper phone for travel.

 

[Mr. Gates]

When will this stupid rumor die ?

Every year it's the same BS.

Not going to happen. It's getting pretty cheap already.

Wan't a cheaper iPhone ? Get the previous model, it's already been discounted.

Want it off contract ? Whats the point ? As soon as you use it you're going to have to get a data plan.

This rumor is dumb as hell.

 

[definitive]

less expensive? you can already get some versions of the iphone for free with a contract. unless the new one will come with a bar of gold, i don't see how the deal could be any better than what's available right now.