Analyst: Cheaper iPhone Would Be a Bonanza for Apple

For once I agree with Toni – at least on the market potential. As to his “surprise” that Apple hasn’t moved in this direction sooner, not so much. Apple can’t even keep up with demand for the current models, let alone a new form factor that would be hugely successful. These capacity constraints cause Apple to have to carefully (and brilliantly) orchestrate their launches. Android on the other hand has the attention and support of all the major handset makers, but one, and therefore doesn’t face the same constraints. Lets just see how this plays out in the coming months.

Toni the Warehouse has been trying to tell Apple how to run the iPhone business, including don’t get in the busimess, from the beginning.

Apple has ignored this brilliant advice, including don’t get in the business, from the beginning & has had a modicum of success making its own decisions.

A device that does not give the full “experience” and/or is made of chintzy materials (highly technical term for Toni to look up) is NOT in Apple’s DNA. Nor should it be.

Toni should go back to doing what he’s good at—assuming anybody can figure what that is– or at least what he’s paid for & leave Apple to make their own product decisions.

Apple has had some small success in its device decisions—no?

Ayuh

I agree with this. But no matter what you think Apple’s strategy should be you are characterized as a “hater” if it doesn’t match what they are doing now.

Look at our PCs. They are all the same now. Very little to differentiate one from the other and justify a higher price. In fact it is only the OS at this point that separates Apple from “the hoards”. It took an eternity (20 years) in “tech time” time for us to get to this point and it was far too long.

Phones will get there a lot faster. In as little as five years the things we carry around will all be much the same. there won’t be an incentive to make a “cheaper” phone for the economy minded. Some reasonable resolution for cameras, GPS components built-in speakers and microphones, etc. will have all been arrived at by everyone, and the price will be low, because they are stamping out so may of them and they will all be the same except for the nameplate.

That’s where we are with computers, and Apple, with their superior operating system (no doubt about that in my mind) is still at only 5% of the market.

If they want to repeat that performance and continue to be “the BMW” of phones, then they need do nothing but hit the cruise button.

Personally I think they deserve a bigger market share, and I think they will have to make some changes to get it.

Call me a hater.

I wouldn’t be surprised to see the speculated smaller/cheaper iteration of the iPhone come in a variety of colors, in the same way that the iPod diversified and truly exploded on the scene with its smaller, more affordable form factors.

The iPhone 3Gs is $49 bucks at AT&T. How much cheaper do they need to be?

It’s not really true that all PC’s are alike. There are very distinct low-end (under $999) and high-end ($999 and up) markets. If you look at high-end PC’s only, Apple has 90% market share. They spurned the low-end market until they entered it with iPad, not a cheaped down Mac. I expect an iPhone mini to be as different from iPhone as iPad is from Mac. They will build the best device for the low-end phone market, not just shrink the iPhone. I would be surprised if iPhone mini runs iOS … I think it will be like the touch-based iPod nano in technology. Apps will get on there in the same way Nike gets on iPod nano: Apple will put them on there. If you look at the current iPod nano, it is really a shuffle with a touchscreen, and the very popular candy bar nano has gone missing. A candy bar nano with a full face touchscreen would be a good place to start on a low-end smartphone.

> We are surprised that Apple hasn’t moved
> sooner to introduce a lower priced offering

> After all, the smartphone world is a platform
> war, where first mover advantage and scale
> matters.

This reminds me of what people said in 2005-2006 about how Apple was missing their chance to enter the phone business.

I can’t see Apple compromising the experience, and I can’t see Apple producing a radically different phone, because they want to take advantage of the existing new ecosystem. When I developed for Palm, I remember how painful it was to change my app to work with my smaller-screened Pixi. So I doubt that they will go that route.

Toni seems poorly informed – Apple already makes iPhone 4 at an end user price of $199. I think what she means is a price of about $399, which would be entirely paid for by carriers (since it’s about the subsidy they give iPhones today), creating a “free” phone for the end user.

The question is what can be done about getting a cheaper data plan and still have a usable device. When the operating costs of your phone are over $100 a month, it probably doesn’t matter how low the entry level price is.

It’s tough. That’s why there has been no cheap iPhone until now. It will be very interesting to see how they solve these problems.

D

I’m definitely of two minds:

1) I think the idea has merits to target a new audience and put the squeeze on Android phones (beyond what the Verizon iPhone will do). A cute little functional pocket stuffer from Apple would likely be a smash hit IF IT WERE MADE BY APPLE UNDER APPLE’S DESIGN TERMS.

2) Toni Sacconaghi has so totally proven himself to be clueless that it MUST be a bad idea.

yes.