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Apple seen introducing mid-range contract-free $350 iPhone in Sept.

post #1 of 88
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Apple will finally address the huge pre-paid mobile phone market in September when the company releases a mid-range, contract-free iPhone, one Wall Street analyst believes.

"It's time for a mid-range iPhone," analyst Chris Whitmore with Deutsche Bank declared in a note to investors on Monday. He believes Apple will offer a lower-end iPhone priced between $300 and $500 paired with a pre-paid voice offering.

Whitmore noted that of the addressable market of 1.5 billion mobile customers worldwide, two-thirds of those are pre-paid users. He sees a so-called "iPhone 4S," released alongside an anticipated fifth-generation iPhone, as a new category of device that would help Apple address that market.

If Apple were to price this "iPhone 4S" at $349, Whitmore estimates that Apple could have the product be incremental to its corporate gross margin without negatively impacting profitability.

"Apple shipped (about 87 million) units over the past 2 years which suggests it has reached only 6% penetration of its current addressable subscribers," Whitmore wrote. "Looking forward, we believe Apple has room to run both in terms of greater market penetration as well as incremental carrier additions going forward."

Whitmore sees an "iPhone 4S" that would look a lot like the low-end iPod touch. He estimates that an unlocked iPhone priced at $649 has a manufacturing margin of 70 percent, while the $229 low-end iPod touch has 38 percent margins.

"Using this framework, we believe an 8GB iPod touch with an RF module could be priced ~$350 (unlocked without a contract) and still generate healthy manufacturing margins of ~53%," he said.



Speculation of a contract-free entry-level iPhone geared toward the huge global prepaid market is of course nothing new. Just last week, a different analyst stoked the fire by declaring that a "mini iPhone" would give Apple a larger piece of a $70 billion worldwide market.

Wall Street watchers believe that a cheaper iPhone would be a meaningful way for Apple to expand the market of its smartphone business. Surveys based in China, where prepaid subscribers are the majority, show that hardware cost, service plan cost and upfront payment are the three largest hurdles, respectively, to iPhone adoption.

In addition to speculation and encouragement, there have also been media reports that have suggested Apple is working on a cheaper iPhone. In February, The New York Times revealed that Apple has looked into building a cheaper iPhone, but rebutted reports from The Wall Street Journal and Bloomberg that claimed the company is planning to release a smaller model about half the size of the iPhone 4.
post #2 of 88
This kind of makes sense I suppose with all these conflicting reports about 'iPhone 5' and 'iPhone 4S' - on one hand we have a brand new design with completely new features, and on the other a phone which will look similar to the iPhone 4 and be merely an evolutionary upgrade.

With recent news of a China Mobile iPhone as well, it seems likely Apple will have to cater for a cheaper device in that market and frankly why wouldn't Apple expand its iPhone offerings beyond merely one device.

Now is the time. A 3" iPhone 4S and a 4"+ iPhone 5. Come on Apple, don't tell me we will have 'waited' 15 months for nothing, or rather an extra 3 months for a mere evolution to a revolutionary device.
post #3 of 88
Prepaid Mobile is the way to go in Countries Like India and China.

Apple Released Iphone 3GS in India This week for $450 (Unlocked)...For a 2 year old device this is still pricey by around $75-$100.

If they able to relase Iphone 4 for this price that will be Great (Once I5 released)
post #4 of 88
Quote:
Originally Posted by jakevin. View Post

This kind of makes sense I suppose with all these conflicting reports about 'iPhone 5' and 'iPhone 4S' - on one hand we have a brand new design with completely new features, and on the other a phone which will look similar to the iPhone 4 and be merely an evolutionary upgrade.

With recent news of a China Mobile iPhone as well, it seems likely Apple will have to cater for a cheaper device in that market and frankly why wouldn't Apple expand its iPhone offerings beyond merely one device.

Now is the time. A 3" iPhone 4S and a 4"+ iPhone 5. Come on Apple, don't tell me we will have 'waited' 15 months for nothing, or rather an extra 3 months for a mere evolution to a revolutionary device.

I'd think the iPhone 4 base design will hold for the next iteration and that a plastic-backed iPhone with "modern" components could be used for a $350 model. For instance, the same display panel in the iPod Touch, with A4, etc.
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post #5 of 88
In the future everyone will have an iPhone for fifteen minutes...
(with apollogies to Andy Warhol)
post #6 of 88
Quote:
Originally Posted by AppleInsider View Post

He estimates that an unlocked iPhone priced at $649 has a manufacturing margin of 70 percent, while the $229 low-end iPod touch has 38 percent margins.

"Using this framework, we believe an 8GB iPod touch with an RF module could be priced ~$350 (unlocked without a contract) and still generate healthy manufacturing margins of ~53%," he said.

This was clear to anybody looking at the price difference between an iPhone 4 (unlocked, 32 GB) and an iPod touch (4th generation, 32 GB), but this 70% raw margin on the iPhone is really one of the best money-making machines currently around.
Think of it, do you know any volume product that has 70% profit margins (and costing three figures)? And that carriers hiding that profit margins in monthly fees is the only real reason the iPhone has almost twice the profit margin of an iPod touch. Force carriers to simply mark on their monthly bill what of it is used to re-pay the loan they have you to purchase the phone (and force them to put a time limit on this) and suddenly handsets might actually be compared on price as well.
post #7 of 88
I would LOVE to have an iPhone that only made calls and synced contacts and nothing else... for less than half the weight, size and price. I don't need to carry around a computer in my pocket 24/7. I'm a freelancer but I spent 95% of my time at my iMac working. I don't need web and email and angry birds for the one hour that I might be away from my desk. And if I DO need web and email (for a meeting let's say)... I'll take along my iPad or MacBook Air. For now, I'm suffering with my crappy RAZR. Can't bring myself to get an iPhone. Too heavy. Too much. Don't need it. Hopefully this mid-range rumor is not just a cheaper iPhone 4 but a whole new form factor.
post #8 of 88
Predicting what Apple will do based on market analysis is like forecasting the weather based on whether it rained last week.
post #9 of 88
A cheap "mid-range" iPhone would dilute the product image, causing Apple to eventually appear no different than Dell or Acer in the eyes of the consumer.

Apple doesn't need market saturation to empower the brand name recognition that drives revenue for those companies. I sincerely hope Apple can find a different method to address the pre-paid market, assuming they even feel the need to enter that market.
post #10 of 88
Quote:
Originally Posted by brutus009 View Post

A cheap "mid-range" iPhone would dilute the product image, causing Apple to eventually appear no different than Dell or Acer in the eyes of the consumer.

Apple doesn't need market saturation to empower the brand name recognition that drives revenue for those companies. I sincerely hope Apple can find a different method to address the pre-paid market, assuming they even feel the need to enter that market.

Sure, you don't want to dilute your brand, but if you have sufficiently saturated a market tier you have to move to grow the brand. Even as more people move to smartphones their is even more need to respond to these dumbphone to smartphone switchers.

Growing the iPhone into a new model is expected. We can see this with the iPod and Mac. I think we can assume Apple's helped their AppleTV brand, revenue, and profit with the $99 version so sometimes it can be good for business.

They are already going for this with the $49 iPhone 3GS on AT&T which is why I think this will be basically be an iPhone 4 from a component standpoint. Can you see how the iPhone 3GS would likely be about $350 out of contract right now? I can.
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post #11 of 88
So your job is to watch Apple and you come up with this? He obviously doesn't understand Apple. They'll never go for subpar.
post #12 of 88
Quote:
Originally Posted by brutus009 View Post

A cheap "mid-range" iPhone would dilute the product image, causing Apple to eventually appear no different than Dell or Acer in the eyes of the consumer.

Apple doesn't need market saturation to empower the brand name recognition that drives revenue for those companies. I sincerely hope Apple can find a different method to address the pre-paid market, assuming they even feel the need to enter that market.

And yet there are cheap iPods, and cheap macs. You can keep your brand superiority by buying the more expensive items.
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post #13 of 88
Quote:
Originally Posted by markvdrheijden View Post

So your job is to watch Apple and you come up with this? He obviously doesn't understand Apple. They'll never go for subpar.

Who said "sub-par". This is more expensive than an iPod touch which is twice the machine as a iPhone 3GS. Well 35% more the machine.
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post #14 of 88
Quote:
Originally Posted by brutus009 View Post

A cheap "mid-range" iPhone would dilute the product image, causing Apple to eventually appear no different than Dell or Acer in the eyes of the consumer.

Apple doesn't need market saturation to empower the brand name recognition that drives revenue for those companies. I sincerely hope Apple can find a different method to address the pre-paid market, assuming they even feel the need to enter that market.

I'd almost agree with you, except, that didn't happen when Apple introduced lower priced models of the iPod, starting with the iPod Mini. As long as the quality of the phone is in keeping with Apple's strict standards, this should not be a problem. This would be a great thing for teenagers, as I'm gonna guess that they may lose or damage phones more often, although I am just speculating, and this would make a less expensive replacement than $650.

Then again, I don't see a problem with making the current 3GS model contract free. It surprisingly is doing very well on AT&T at $49 with a contract. This would have at least a 50% profit margin, as the phone's original build cost was around $178 back in 2009. (iSupply Estimate)
post #15 of 88
Quote:
Originally Posted by solipsism View Post

They are already going for this with the $49 iPhone 3GS on AT&T which is why I think this will be basically be an iPhone 4 from a component standpoint. Can you see how the iPhone 3GS would likely be about $350 out of contract right now? I can.

But there is still a huge subsidy there.
16GB iPhone 4 goes from 650 to 200; a $450 difference.
That means an 8GB 3Gs is still $500 out of contract.
Thre's nothing mid-range about that.

So to answer your question: no, I can't really see it, not given everything that's currently on the table.

As markvdrheijdn just wrote, Apple won't go sub-par. If they enter the pre-paid market, it will be because they have a unique solution that compels the consumer, not just some old tech lying around.
post #16 of 88
Quote:
Originally Posted by Takeo View Post

I would LOVE to have an iPhone that only made calls and synced contacts and nothing else... for less than half the weight, size and price. I don't need to carry around a computer in my pocket 24/7. I'm a freelancer but I spent 95% of my time at my iMac working. I don't need web and email and angry birds for the one hour that I might be away from my desk. And if I DO need web and email (for a meeting let's say)... I'll take along my iPad or MacBook Air. For now, I'm suffering with my crappy RAZR. Can't bring myself to get an iPhone. Too heavy. Too much. Don't need it. Hopefully this mid-range rumor is not just a cheaper iPhone 4 but a whole new form factor.

I'll take one of those, too! Actually something with the functionality of the previous generation iPod nano (play media, sync contacts/calendars), and about that same screen size, with a phone added would be perfect. They could even make it a touch screen if they wanted. It would be much better than the tiny touch screen on the current [crippled] nano. They could extent the length of the nano and make it a flip phone. Lots of options for making a "feature" phone to address the mid-range and pre-paid markets.
post #17 of 88
Quote:
Originally Posted by brutus009 View Post

But there is still a huge subsidy there.
16GB iPhone 4 goes from 650 to 200; a $450 difference.
That means an 8GB 3Gs is still $500 out of contract.
Thre's nothing mid-range about that.

Nobody is saying that is mid-range. It is pricey.

Quote:
So to answer your question: no, I can't really see it, not given everything that's currently on the table.

Thats a non-sequitor from your previous argument. You are merely pointing out that 3Gs is now expensive, so it wont be cheap ( if it is to be the cheap model).

Quote:
As markvdrheijdn just wrote, Apple won't go sub-par.

As I wrote, sub-par != cheap. cheap != sub-par

Quote:
If they enter the pre-paid market, it will be because they have a unique solution that compels the consumer, not just some old tech lying around.

They *may* have a different phone. More likely a re-branding. The 3GS could be slightly re-designed, use a better processor, and called something else, thats good enough. Making it smaller ( i.e. a mini) causes far more headaches than just using something similar to the 3GS design.
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post #18 of 88
Just because analyists *want* it to happen, doesn't mean it's going to. Is any one at Apple really thinking, "Gosh if only we could see more iPhones! But for a lower profile margin, with brand diluting features!"

Yeah, a mid-range iPhone would be a re-packaged 3GS.

How else would Apple make a midrange model? Less features? Like what — less touch enabled? No Bluetooth/WiFi radio? 4GB Memory? At the volume Apple buys, NAND memory and BT/WiFi chips have got to be dirt cheap — so removing those would have minimal impact on costs, and severely impact the usability.

A smaller screen would have to have the same pixel dimensions as the iPhone 3G or iPhone 4 — which would mean smaller icons and UI elements to touch.

A less capable iPhone simply isn't an iPhone!
post #19 of 88
Quote:
Originally Posted by asdasd View Post

And yet there are cheap iPods, and cheap macs. You can keep your brand superiority by buying the more expensive items.

Still, the cheaper iPods and macs aren't just "cheaper" but rather a specialized subset of a given category. For example, an iPod Nano sacrifices functionality to keep the key features in a new form factor and ultimately achieves a lower price point.

The problem with the "cheap" iPhone is this: which features get scrapped to differentiate the pre-paid iPhone from the "full-featured" iPhone? What can Apple do to cut costs while maintaining the user experience?
post #20 of 88
Quote:
Originally Posted by brutus009 View Post

But there is still a huge subsidy there.
16GB iPhone 4 goes from 650 to 200; a $450 difference.
That means an 8GB 3Gs is still $500 out of contract.
Thre's nothing mid-range about that.

You really think AT&T is paying Apple $500 ($450 subsidy + $49 subsidized price) for an 8GB iPhone 3GS?


If the ASP is about $625 and we only consider the iPhone 4's (which favours you) of the 16GB and 32GB capacity which have a subsidized price of $200 and $300 you only have about $300 subsidy. Using that model we have $300 + $49 = $349.

The US market makes for a good measure but you shouldn't look at markets with strong smartphone saturation for the greatest push from Apple in this area. China, India, Brasil and other such countries are where I can see this being the biggest hit.
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post #21 of 88
Quote:
Originally Posted by brutus009 View Post

Still, the cheaper iPods and macs aren't just "cheaper" but rather a specialized subset of a given category. For example, an iPod Nano sacrifices functionality to keep the key features in a new form factor and ultimately achieves a lower price point.

The problem with the "cheap" iPhone is this: which features get scrapped to differentiate the pre-paid iPhone from the "full-featured" iPhone? What can Apple do to cut costs while maintaining the user experience?

I am really talking about the difference in price between an iPod touch and an iPhone.

Which features get scrapped? none. iOS 5 runs on the 3GS.
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post #22 of 88
Quote:
Originally Posted by Unicron View Post

Just because analyists *want* it to happen, doesn't mean it's going to. Is any one at Apple really thinking, "Gosh if only we could see more iPhones! But for a lower profile margin, with brand diluting features!"

Yeah, a mid-range iPhone would be a re-packaged 3GS.

How else would Apple make a midrange model? Less features? Like what — less touch enabled? No Bluetooth/WiFi radio? 4GB Memory? At the volume Apple buys, NAND memory and BT/WiFi chips have got to be dirt cheap — so removing those would have minimal impact on costs, and severely impact the usability.

A smaller screen would have to have the same pixel dimensions as the iPhone 3G or iPhone 4 — which would mean smaller icons and UI elements to touch.

A less capable iPhone simply isn't an iPhone!

As you suggest: It would be the iPhone 3GS repackaged.

in spetmber they will have

an iPhone 5 ( or 4S)
An iPhone 4.

a 3GS - all capable of running iOS 5.

When they moved to the iPhone 4 this wasn't possible, because the iPhone 3G was really just the first gen with a new radio chip. It wasn't capable of much. I have a 3GS and it runs fine. Nobody would use speed as a reason to update to the iPhone 4. However the next iPhone will have the processor power of the iPad 2.

So the "crippled" iPhone would be the 3GS, or something like it.
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post #23 of 88
Quote:
Originally Posted by AppleInsider View Post

Apple will finally address the huge pre-paid mobile phone market in September when the company releases a mid-range, contract-free iPhone...

iPhone is and will always be a smartphone. This device would still be force to have a data plan. There would be nothing 'mid-range' about this device except for its utter lack of features from the real iPhone. No one would buy it when they have the option of the real iPhone. Case in point, the first-gen iPhone 4 GB. Discontinued in two months because people bought the eight. And a "mid-range, contract-free" iPhone would lack even more.

Quote:
"It's time for a mid-range iPhone," analyst Chris Whitmore... ...declared...

It's time for all analysts to be jailed.

Quote:
Originally Posted by anonymouse View Post

Predicting what Apple will do based on market analysis is like forecasting the weather based on whether it rained last week.

I have a better one: Predicting what Apple will do based on market analysis is like forecasting the weather based on what you ate last week.

HEY. IDIOTS. (Sorry, talking to the analysts now). You want Apple to release a "mid-range" phone? Hound the carriers to make data plans OPTIONAL. The EXISTING iPhone instantly becomes mid-range, you get millions more subscribers from the people who couldn't care less about/don't need/couldn't afford a data plan, and Apple keeps their massive revenue stream because they're selling even more of the "expensive version" of the iPhone.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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post #24 of 88
Just smack a 3G + GSM sim card on an iPod Touch.. Done!

That will worth around $400 I guess.

The problem is that those folks doesn't have purchasing power to benefit the App store, maybe, they need to coordinate to carriers to enable direct purchasing of apps through a prepaid card?
post #25 of 88
Quote:
Originally Posted by Tallest Skil View Post


HEY. IDIOTS. (Sorry, talking to the analysts now). You want Apple to release a "mid-range" phone? Hound the carriers to make data plans OPTIONAL. The EXISTING iPhone instantly becomes mid-range, you get millions more subscribers from the people who couldn't care less about/don't need/couldn't afford a data plan, and Apple keeps their massive revenue stream because they're selling even more of the "expensive version" of the iPhone.

The markets we are talking about have optional pre-paid plans. And people who want an iPhone would mostly want a data plan. The US centric nature of this site makes me have to continue to want to beat my head against the wall.

Here is a sample of pre-paid options in the Three store in the UK - an established market.

http://threestore.three.co.uk/payg/default.aspx?ID=1184

None are the iPhone for reasons of price. Prices range from £169 to £89. The top two options are a Blackberry and an Android phone.

At the top it says

For £15; all you can eat data, 300 minutes, 3,000 texts. When that runs out - in general that talk time will run out first - you get another £15. It lasts a maximum of a month.

Every single shop in the land has the ability to buy a top up. Whats fairly common in the UK is the vast majority of plans in most countries.
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post #26 of 88
Quote:
Originally Posted by makingdots View Post

[B]
The problem is that those folks doesn't have purchasing power to benefit the App store, maybe, they need to coordinate to carriers to enable direct purchasing of apps through a prepaid card?

Thats a good idea - before the app store people on cheap phones used to pay £3-5 for ringtones.The used sms to pay and it reduced their balance. I think that if people have already spent money - i.e. bought a pre-paid card, or it is about to run out in a few days anyway, they are much more likely to spend on something trivial.
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post #27 of 88
Quote:
Originally Posted by asdasd View Post

Thats a good idea - before the app store people on cheap phones used to pay £3-5 for ringtones.The used sms to pay and it reduced their balance. I think that if people have already spent money - i.e. bought a pre-paid card, or it is about to run out in a few days anyway, they are much more likely to spend on something trivial.

This exists. You can buy iTunes pre-paid cards that tie to your Apple ID.
post #28 of 88
Apple isn't going to introduce a cheaper iPhone, they are going to introduce a line of iPods that allow you to make phone calls with a prepaid calling card.

It's two very different markets.

The new device? The ipod touch phone.
post #29 of 88
I really hope iPod touch just becomes iPod. iPod nano is now touch screen, iPod touch doesn't makes sense anymore. This way an iPod name gets a makeover as a communication, gaming and media device.
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post #30 of 88
Quote:
Originally Posted by anwerman View Post

Apple isn't going to introduce a cheaper iPhone, they are going to introduce a line of iPods that allow you to make phone calls with a prepaid calling card.

It's two very different markets.

The new device? The ipod touch phone.

No, if Apple were to "phoneitize" their iPod line, they'd simply combine iMessage, iChat (for audio), and FaceTime and have THAT be the way they do calls.

Quote:
Originally Posted by iVlad View Post

I really hope iPod touch just becomes iPod. iPod nano is now touch screen, iPod touch doesn't makes sense anymore. This way an iPod name gets a makeover as a communication, gaming and media device.

This year's the tenth anniversary of the iPod. I see the classic being discontinued and the iPod touch being renamed.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #31 of 88
Quote:
Originally Posted by brutus009 View Post

This exists. You can buy iTunes pre-paid cards that tie to your Apple ID.

We know that, but it's troublesome to buy a different card for purchasing apps.

Wouldn't be great if your prepaid plan can deal directly with it? although Apple needs some carrier cooperation and that's a pain.
post #32 of 88
Quote:
Originally Posted by anonymouse View Post

Predicting what Apple will do based on market analysis is like forecasting the weather based on whether it rained last week.

My feelings exactly.

Apple's goals are rarely market/business-related at all. The goal is the product.

They may make all iPhones cheaper, and they may make a cheaper lower-end phone, but to make a "cheap iPhone" to sell alongside the current iPhone is not very Apple-like at all.

It would just be a slightly slower, crappier iPhone for less money.
Does that really sound like Apple?
post #33 of 88
Quote:
Originally Posted by solipsism View Post

You really think AT&T is paying Apple $500 ($450 subsidy + $49 subsidized price) for an 8GB iPhone 3GS?

Of course, minus some volume discounts possibly. Apple sells the iPhone 4G (16 GB) in the UK unlocked for £510 (£425 pre-tax or $677, ie, a 4% premium compared to the US' $649). It sells the 3GS 16 GB for £428 (£357 pre-tax or $568). Correcting again for this 4% premium, Apple would sell the 3GS 16 GB unlocked in the US for a predicted $545.

Which means AT&T is giving you a $494 subsidy (assuming the same wholesale prices for the Apple Store division of Apple and AT&T and same retail margins, which is only approximately true). This whole subsidy business is one of the biggest scams going on at the moment and only it allows for 70% gross profit margins.

Three years ago, I bought an iPhone 3G 16 GB through an authorised Apple reseller in Switzerland. The box was marked with CHF1100 (about $1000 at that time), the store then subtracted the carrier subsidy (which it was getting reimbursed for by the carrier) of CHF750, and I only had to pay CHF350. That was in the days of carrier exclusivity and gives you an idea how big a loan the carriers were willing to extend to their customers.
post #34 of 88
Quote:
Originally Posted by Tallest Skil View Post

iPhone is and will always be a smartphone. This device would still be force to have a data plan.

There are enough people who own an iPod touch + dumbphone. Were it not for the insane premium an iPhone carries compared to a comparable iPod touch, these people would happily dump that dumbphone and switch their iPod touch to an iPhone with a voice plan only.
post #35 of 88
Quote:
Originally Posted by brutus009 View Post

The problem with the "cheap" iPhone is this: which features get scrapped to differentiate the pre-paid iPhone from the "full-featured" iPhone? What can Apple do to cut costs while maintaining the user experience?

I think the harder part is differentiating and not the actual cost (though that naturally is also a factor). How can Apple sell a phone with a 40-50% profit margin alongside a phone with a 70% profit margin without threatening that 70% margin business too much.
post #36 of 88
Quote:
Originally Posted by noirdesir View Post

This whole subsidy business is one of the biggest scams going on at the moment and only it allows for 70% gross profit margins.

I still don't entirely understand why this is such a scam. Without the 2 year contract I take to get a subsidy, the carrier plans remain the same price. I will strongly agree that those plans are ridiculously inflated, but they aren't any better from carrier to carrier, so how am I being scammed? What am I missing?

My best guess is that the existance of contracts somehow help to keep absurd carrier plans afloat... ??
post #37 of 88
Quote:
Originally Posted by noirdesir View Post

I think the harder part is differentiating and not the actual cost (though that naturally is also a factor). How can Apple sell a phone with a 40-50% profit margin alongside a phone with a 70% profit margin without threatening that 70% margin business too much.

I agree; similar thoughts ran through my head when I wrote that post. So they're not only diluting the product image, but revenue and profits as well, as a direct correlation.
post #38 of 88
Quote:
Originally Posted by Unicron View Post

... How ... would Apple make a midrange model? Less features? Like what less touch enabled? No Bluetooth/WiFi radio? 4GB Memory? At the volume Apple buys, NAND memory and BT/WiFi chips have got to be dirt cheap so removing those would have minimal impact on costs, and severely impact the usability.

A smaller screen would have to have the same pixel dimensions as the iPhone 3G or iPhone 4 which would mean smaller icons and UI elements to touch.

A less capable iPhone simply isn't an iPhone!

I've been thinking/saying this for many months now. It just doesn't make sense for Apple to build a second, slightly crappier iPhone to sell either alongside of, or instead of, the original.

The low end of the market doesn't even want an iPhone IMO, they want a feature phone. Smartphones are attractive, but it's a mistake to think that every goat-herder and tour boat operator with a flip phone secretly really wants a full-blown smartphone computer in their pocket because they just have to join Twitter. This is a conceit of the technorati.

If this hypothetical phone didn't do apps at all, but instead just did the basic phone functions, plus texts, music and picture taking like any feature phone, it would sell like hotcakes. Give it a tiny little square screen like the iPod nano, hell, maybe it even runs iPod nano games. It doesn't need a keyboard if it has (virtual) T9 like any flip phone, it doesn't need a contract, and it won't suck data.

It will be a little piece of Apple magic in your hand and you will be able to buy it in India and Africa and all the other places where the feature phone is still king for next to nothing. It could be the iCloud gateway drug.
post #39 of 88
Quote:
Originally Posted by brutus009 View Post

This exists. You can buy iTunes pre-paid cards that tie to your Apple ID.

We know that, but it's troublesome to buy separate prepaid cards for purchasing apps. Plus, it's availability too.

Wouldn't be great if your carrier's prepaid card can directly deal with it? Although Apple needs some carrier cooperation again which is a pain.
post #40 of 88
Quote:
Originally Posted by noirdesir View Post

There are enough people who own an iPod touch + dumbphone. Were it not for the insane premium an iPhone carries compared to a comparable iPod touch, these people would happily dump that dumbphone and switch their iPod touch to an iPhone with a voice plan only.

This is exactly the market Apple needs to address. I have an AT&T Family Plan with 2 iPhones and 2 dumb phones. The dumb phones are for my children. The only reason they have dumb phones is that I don't want them to have a data plan which could get expensive. Now, if Apple were to make a phone that did not require a data plan, I would get it for my children. With iMessage, I may even be able to dump the unlimited family texting plan that costs $30 per month.

Making the overall cost of ownership lower is the way Apple can keep the growth of its phones going.
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