Apple again predicted to build low-cost iPhone for emerging markets - Page 2

You're revising history. Early PCs were not less expensive than Apple's offering of the day. What got PCs ready acceptance was the IBM name on the box. It wasn't until an inexpensive chip set became available that a lot of OEMs got into the game and began to build reasonable quality PCs that enterprise was willing to buy that prices came down.  The price drop was caused because no one had a way of differentiating one box from another except by price, and the IT of the day were highly confident of anything connected to the IBM name. 

 

I will give IBM this: They got out of the PC business LONG before anyone else saw where the race to the bottom would lead to today.

 

I see the emerging markets of today as a different landscape then the early computer days. Today the iPhone is as easily fit to any phone services as is the Andriod phones. The OS of the phone does not cut out one brand or another like the PC-DOS vs Apple II split did in the 1970s. Apple just needs to stick to their knitting and market to the governments and large businesses of the countries in question. The users who bicycle to and from their tiny market stalls have no reason to care what OS the phone uses as long as its cheap enough to buy and lasts them long enough. 

 

My personal opinion is that targeting the average citizen of these emerging markets will turn out to be a boondoggle and those chasing this consumer market will lose their shirts in the process. No matter what country one does business in, it will be a cat fight for the business. Going to where even less will be sold at a thin profit margin is a pipe dream. Look at Nokia. They were and may still be the king of the low-cost phone markets for decades. How much loyalty did that earn them? 

What I ask is this: are those new iPhone 5 ready apps still made with non-retina versions of their graphics?

The iPhone 5's screen may have grown to give way to a slightly smaller non-retina phone, just like what Apple did with the iPad..

It fits their modus operandi.

 

…iPhone 4. iPhone 4S. I don't get why people think there is "room" for a 2.5" phone. It's 2008 all over again…

No. About $300 is more like it.

 

All the major phone manufacturers Nokia (symbian), Samsung (Android), Sony Ericcsson (Android), HTC (Android), Google Nexus and even the Nokia Lumia (Windows 7) are selling 4inch screen smartphones phones at the ~$300 price range without contract in all the major developing markets. iPhone on the other hand costs ~$700.  An new iPhone even at ~350 has a tremendous market value i believe. I don't know though, whether Apple can make any profit out of it. 

I'm not sure how that's relevant, but I have a 4S 64 GB, bought in the U.S. for $850 plus tax. It would have been more expensive in China. China Unicom will subsidize part of the cost of an iPhone, but only if you sign up for one of the more expensive plans.

 

If they can't make a profit from it then what's the point exactly?

 

People find it difficult to grasp the notion that profit is more important than market share. This is why they make up all kinds of weird scenarios in which Apple makes odd compromises and complicates their product lines so that they can attack the unprofitable end of the market.

I guess in some people's mind market share is more important than profits. But I'll ask again, how long can Nokia and HTC afford to sell their phones dirt cheap in order to get people to buy them?

I suppose Apple could make a cheap plastic non-retina phone for certain countries but I'm not sure exactly what the upside would be since they value themselves as a premium brand. I suppose it would lock people into their ecosystem but if the phone is mainly used for talk and text (not sure how many in the "emerging markets" an afford a monthly data plan) how do they really experience Apple's ecosystem? It's not likely they'll be buying a lot of apps off the App Store or media off iTunes.

My name is Joe.  Joe is thinking of buying a new cell phone.  Joe sees an ad and then follows up with a trip to the store and this is what he sees:

1. A very small phone.  Smaller than previous iPhones.

2. A very rugged phone.  More rugged than the previous iPhones.

3. A cheaper phone.  Costs $4.99.

4. Has cheaper available data options.  Costs 240 USD less/yr in data than previous iPhones.

5. While he realizes quickly that he can't do all the same things as a previous iPhone (like browsing experience, not all apps available, etc.), he can still read email, text, talk, listen to music & control his other compatible AirPlay and iOS devices around his home, car and office.

 

Joe1 is in low to middle income and while he would get a previous version of iPhone he is happy with a choice like the one above, especially to save money.

Joe2 is middle to upper income and he already has an iPad Mini.

Joe3 was about to buy an Android device but then sees this phone, the initial & contract price is almost identical to the others, and it just looks a little better.

Joe4 THINKS he is making a wonderful decision but really he doesn't know much of anything, the commercials were just so damn good.

 

I wonder how many "Joe"s are out there?

Which "Joe" might you be?

 

[edit: Joe5 is a fairly responsible 10 yr old (almost 11) whose parents thought this a good time to get him a phone.]

Edited by drewys808 - 12/6/12 at 10:19am

Listen, I'm not saying that one is coming out soon, but there are conceivable/realistic options of a profitable hardware offering.

But also, don't forget that there is indirect profitability by gaining a more controlling critical mass of the ecosystem (i.e. iOS & brand).

I'd actually like to se a go phone like model that has just the native apps, limited app store downloads, with iTunes /podcasts are cloud based only. And have the service pay as you go with tiered data. I think that would be a great alternative. Keeping the hard drive at a minimum, non retina, locked drive capacity. That could sell in emerging markets. He'll, I'd buy one. Now that I've been an iPad user for nearly 2 years, I barly use my iPhone anymore. Only times I do is when I'm out on the evenings or weekends. And of all the apps I use the native ones the most. Text, web, email and phone. Keep it simple. However, seeing as though the 4 most expensive components on the iPhone are the screen, battery, memory and wireless chips, I'd say it would have to be non retina, which I think Apple is done messing with low-res on the iPhone, so I doubt we will see anything dramatically lower priced anytime soon.

Yes, from what I understand, in China and many other countries, you pay the full blocked price for an I phone too. Th chip has a very nominal monthly lease and then you pay as you go on voice and data. In some cases that might be equivalent to $80/mo. And most cases much cheaper. So it all depends on how much you use the service.

Why go all data? Because that's the inevitable future.
Apple had zero control? What about texting (iMessage)? Apple changed how we text now on iPhones, didn't they? You can already use Skype on your iPhone. Or google voice can call phone numbers. It's going to happen.

 

Capped talk is the "inevitable future"? Voice over data is the "inevitable future"?

 

What about it? You're still forced to have texting with an iPhone. It's built right into the plan price.

 

It's known that carriers pay about $100 more for subsidizing an iPhone.  This results in a lot of extra cash being tied up in phone subsidies.  AT&T, for example, often has over a half billion dollars sunk into iPhone subsidies alone during a new model debut.  They have also has said that it takes an average of 20 months to get repaid for the subsidy (it's a loan, really) from someone's cell plan.

 

This is why some carriers overseas have stopped subsidizing iPhones, and it's why non-Apple salespeople tend to push Android phones with their higher profit for the store.  Some analysts have expressed worry that if enough carriers stop subsidzing iPhones, Apple will be forced to lower their prices.  Doesn't seem likely for a while, though.