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Apple would address 65% of smartphone market with low-cost iPhone - Page 2

post #41 of 95

People keep talking about the "developing" world. Screw the developing world. People in those kind of countries are probably lucky to make $1000 a year. How is selling a phone to somebody there going to help Apple?

 

If Apple is offering a low cost, almost no margin phone, then where will the profit come from? 

 

Remember when the talking heads said that Apple offering a dividend would be a good thing? That turned out to be a huge pile of crap too.

 

If Apple had listened to all of the talking heads and analysts, and did everything that was recommended, Apple would have been bankrupt and out of business a long time ago.

 

Apple can't even keep up with current demand on many of it's product lines. They should worry about that instead of introducing new, cheap product lines.

post #42 of 95

Apple and low-cost products are not exactly synonymous. I am not saying they are overpriced, merely that Apple is not the place to look for bargain values. It seems like every six months the low-cost iPhone rumors creep out of the shadows.

 

I will admit though I was a tad surprised to see the iPad Mini. Anything is possible with the new Apple, I suppose.

post #43 of 95

This is a bogus analysis about the iPhone market.  Carriers got no desire for a cheaper iPhone, the current iPhone sales it self without any help of carrier's clerks who gladly propose 0$ subsidize phone to non-savvy customers that doesnt care about what phone he want as long its free. 

post #44 of 95
Quote:
Originally Posted by Negafox View Post

Apple and low-cost products are not exactly synonymous. I am not saying they are overpriced, merely that Apple is not the place to look for bargain values. It seems like every six months the low-cost iPhone rumors creep out of the shadows.

 

I will admit though I was a tad surprised to see the iPad Mini. Anything is possible with the new Apple, I suppose.

 

The iPad Mini is a bargain value?

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post #45 of 95
Quote:
Originally Posted by Gatorguy View Post

Schiller implies that Apple has no interest in developing a "cheaper iPhone".  Can't say it's definitive since the original article on his comments was translated into English.

http://www.idownloadblog.com/2013/01/10/phil-schiller-denies-budget-iphone/
Thank you Phil. Can you get a message to Gene Munster please?
post #46 of 95
Quote:
Originally Posted by Xero910 View Post

Apple already owns the majority profit share with their current market share. Focusing on the low-cost market won't help as much as some people think. They should focus on growing their high-cost market.

 

Still, as Tim Cook has spoken about for years, Apple needs to think about it.   

 

E.g. it's better to be prepared with a plan in case subsidies disappear, than to be caught with no response.

 

Quote:
Originally Posted by Gatorguy View Post

Schiller implies that Apple has no interest in developing a "cheaper iPhone".  Can't say it's definitive since the original article on his comments was translated into English.

 

http://www.idownloadblog.com/2013/01/10/phil-schiller-denies-budget-iphone/

 

Maybe.    To me, it reads more like he was saying that Apple didn't want to do a phone without the corresponding ecosystem and experience.   (?)

post #47 of 95
Quote:
Originally Posted by allenbf View Post

Apple should offer a trade in program, with a credit toward a new phone; then sell the used phones off contract to these developing countries. Make $$ twice on each phone, the used phone at a lower margin.

That seems like a great idea. It would score them more points with the Green community, hedge against the adverse effects of carriers eliminating some subsidies, and stimulate more frequent device upgrades. I personally would be far more likely to trade in my one-year-old iPhone and use the credit to upgrade every year if Apple handled it in their trademark easy, customer-friendly way.

 

I read that Apple had ben speaking with an outside aftermarket CE distributor about offloading older models in peripheral markets. Using such a distributors's existing channels on the back end while Apple operates on the front end with customers (online or at an Apple store) would be great.

 

The average iPhone buyer isn't yet comfortable or familiar enough with companies like Gazelle. If Apple offered it, just about everyone would do it.

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post #48 of 95

Apple to Release Mini Sticky "iBuns"

by Gene Munster

 

While Cinnabon owns first-to-market position for small to mid-size cinnamon rolls, a sizable untapped market remains for high-quality, premium priced sticky buns in the United States and abroad. THEREFORE, BEYOND ANY DOUBT, tech giant Apple will add iBuns to its expanding ecosystem.

 

"Existing Apple customers will be able to easily find iBuns from their favorite Apple Store locations or by using GPS on their iOS device, and request them online for in-store pick up" said no one. Additionally, use of iBuns will expand Cupertino's audience further into the diabetes market - known to be heavy tech users.

 

"It's a no-brainer. Apple will do this. I have bet my children's future on this fact. It's guaranteed."

post #49 of 95
Not "would." It would be more accurate to say "might." It would also be clarifying to preface it by saying, "According to one know-it-all pundit..."
post #50 of 95

People are assuming that Apple has to stay high end in terms of price to maintain their profits & build quality. 

 

But there's a chance, between investing in heavy automation at Foxconn and their insane purchasing power, that they could build a high end phone for a low-end price and still maintain enough margin that the whole thing would be a net positive for the company and obliterate every other manufacturer. 

 

Or not, I'm just speculating. But I guarantee TC has at least looked into this strategy. 

post #51 of 95
Re-reporting the same rumor from yesterday? Gene Munster is pleased with AppleInsider.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #52 of 95
Quote:
Originally Posted by jasenj1 View Post

No. Just stop. Please.

 

Apple is not interested in the low-end of the market. Never has been. Never will be (hopefully).

 

Audi, BMW, and Mercedes are not interested in the low-end of the car market. And it would hurt their brands if they went after that market.

 

Apple releases well-built, high-quality products that people pay for. And are happy to do so because of the perceived and real extra value Apple provides.

 

- Jasen.

 

When I worked for IBM in Palo Alto (1973-1980), we would often bring in IT representatives from major accounts -- for long term planning/training/selling of our maimframe computers, communication systems, peripherals, database & data communication software (DB/DC).  Among the likes of Kraft Foods, The Bell Telephone Companies... the various divisions of General Motors were included.   I was once asked to give a DB/DC preso to a group of IT reps from GM, Chevrolet Motor Division.  

 

I kidded my fellow IBM rep:  "Why are you wasting your time with Chevy -- everyone knows that Cadillac is the primo GM brand?"

 

His answer was:  "Think about it -- all the [GM] cars are the same -- but Chevy outperforms all the other divisions put together... in revenue and profit!"

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post #53 of 95
Quote:
Originally Posted by gwmac View Post

Actually they are not so different at all. LTE is very expensive but just leave that out. I also think by using 8 or 16 GB that alone saves quite a bit of money over the 32GB in the iPod. Use a 3.5" screen instead of 4" on the iPod as well. Those two savings alone would easily pay for adding the 2G/3G telephony and data components to make it into a phone. It can easily be done if they chose to do it. They wouldn't need to sacrifice quality or their brand. People would understand as a cheaper model it would not be as fast, as nice a screen, as good a camera, and lack some other premium features. These customers often wouldn't mind or care. 

Do that and you get an iPhone 4/4S.
post #54 of 95
Quote:
Originally Posted by jakeb View Post

People are assuming that Apple has to stay high end in terms of price to maintain their profits & build quality. 

 

But there's a chance, between investing in heavy automation at Foxconn and their insane purchasing power, that they could build a high end phone for a low-end price and still maintain enough margin that the whole thing would be a net positive for the company and obliterate every other manufacturer. 

 

Or not, I'm just speculating. But I guarantee TC has at least looked into this strategy. 

 

No way : Apple is a low volume player ! /s

 

 

“We like our model, as we are evolving it. In every category Apple competes, it is the low-volume player, except in tablets. In the PC market, obviously the advantage of diversity has mattered since 90-something percent of PCs that get sold are Windows PCs. We will see what winds up mattering in tablets,” said Steve Ballmer, chief executive of Microsoft, in an interview with the Wall Street Journal.

post #55 of 95
Quote:
Originally Posted by island hermit View Post

A line of cheap phones will be released under the Performa line... iPhone P4 and iPhone P5.

 

To further accommodate marketing these phones Apple will be whoring out iOS to several vendors.

 

Apple CEO Tim Spindler also announced that there will be other changes to make Apple more competitive.
 

 

Ahh... Der Diesel...  Was ist das? Das ist scheiße!

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post #56 of 95
Quote:
Originally Posted by Captain J View Post

Ah yes, the same crew that said Apple will never launch an ipad mini or a larger screen iphone are at it again.
 

If apple indeed releases such a cheap phone (which I doubt they will), we'll see a different opinion here :)

post #57 of 95
Originally Posted by Captain J View Post
Ah yes, the same crew that said Apple will never launch an ipad mini or a larger screen iphone are at it again.

 

There's a reason we don't want Apple to be everything. I'm sorry you don't know why that is, but it's also the reason Apple has ever been successful.

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post #58 of 95
Quote:
Originally Posted by gordy View Post

OMG, this again?  The iPhone 4, which runs rings around "free" phones, is $1 or less with a contract.

 

I think the tech media wags the dog with some of these stories.

i bought my mother in law a 4S this weekend but my first choice was a free on contract Galaxy S2 Sky Rocket. radio shack was out so i bought a refurb 4S for $50, got a $50 gift card and gave it to my father in law who bought a Galaxy S3. he looked at the iphone but wanted a larger screen

 

my iphone 5 is better than the S3, but on older phones Android is better since last year. 

post #59 of 95
Quote:
Originally Posted by Tallest Skil View Post


What we don't understand is why the up front cost matters when you still pay out the ear monthly regardless of how you get the phone. And yes, even on PAYG, with no data or anything else but voice*, you pay more than these third world countries can handle. So even if Apple makes a magical iPhone that is $200 off-contract with worthless build quality and utterly destroys their brand mindshare, they'd still whine that it's too expensive monthly. 

 

*See, here's the thing: APPLE MAKES A SMARTPHONE. If you want just voice, go buy something else. 

 

Of course, Apple will do this, since they're now in the market of just doing whatever the analysts say they "have" to do.

 

If you think India and China are third world countries, you gotta be kidding. You just don't seem to understand the mobile phone business there. Do you think if iphone has to be bought full price (and of course no contract), it will be having these many buyers? $650+ every two years (which is what most of the users do) is a very high cost.

 

In India (and may be in China too), they go with pay as you use model 90% of the time. They don't have to pay for incoming calls and the outgoing is pretty cheap. Data wise they go with smaller chunks or per MB charges and also they use it only when required. Now iphone costs around Rs 37000 or so ($700+). I don't know if they get the older models, if so, it could be Rs 25000 or so upfront, which is still very high. But if it is say Rs 15000 a huge mass will be able to reach that.

 

As somebody else mentioned, even though there can be a huge following for iphone, it is being ignored there because it out of many people's reach. And if they get apple's taste (pun intended), there might be a lot more to gain for apple.

post #60 of 95
Originally Posted by Takeiteasy View Post
If you think India and China are third world countries, you gotta be kidding.

 

I don't recall saying that. There's a lot more to the world than just India and China. Apple's making tens of billions without even catering to them.


Do you think if iphone has to be bought full price (and of course no contract), it will be having these many buyers? $650+ every two years (which is what most of the users do) is a very high cost.

 

Couple million do already, despite restrictions. And that's just because they can't get it subsidized. With subsidy, a host more would buy it. You don't need it to be a "cheap, off-contract" phone.

Originally posted by Relic

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post #61 of 95
The Shuffle didn't "destroy" the iPod's mindshare so were it done right a smaller, simpler iPhone wouldn't automatically do so either.
post #62 of 95
Quote:
Originally Posted by gwmac View Post

If Apple can make a 32GB iPod touch for $299 and presumably make their profit margin, there is no reason why they couldn't make a cheaper iphone with maybe even less memory of around 8 or 16 GB and not make similar margins. Whether they choose to do that or not is up to them and I really don't have a dog in that race as it wouldn't effect me. But I don't think it would be a bad decision at all if they chose to offer a product in the largest market segment where they currently aren't really competing.

The thing about these super cheap Android phones is they get people into the ecosystem. They get people familiar with Google apps and how to feel comfortable using an Android phone. When these people upgrade their phones and have more money to afford more expensive models they will probably stick with Android because that is what they are familiar using. Apple would be smart to offer a cheaper alternative to get them into the iOS ecosystem.

By not including LTE and using older specs they could make a very nice phone at a reasonable price and still make their typical margins. But the real reason to do this would be to give that customer a good reason to buy the regular iPhone model later down the road.

 

As I've posted in other threads, I think the key is to look at who would be buying these phones -- and why?  

 

I suspect that for many emerging [technology] countries a smart phone is a major purchase... and it may be the first/only "personal computer" available to that person or home/family.

 

If Apple can make the iPad Mini into a useable phablet with Voice/Texting (BT mic/earphone or hold to ear in a pinch) -- I think that the iPad Mini would be a better choice for many of the above people.

 

The iPad Mini is already price competitive *

  • $459  iPad Mini WiFi + Cellular --16 GB A5
  • $549  unlocked iPhone 4S --16 GB A5
  • $450  unlocked iPhone 4 -- 8 GB  A4

 

If you could afford/choose only one -- which would it be?

 

I suspect that there will be 2 refreshes of the iPad Mini in 2013 -- and the current 16 GB WiFi Cellular model will be sold at $199-$249

 

* High import tariffs for countries like Brazil can be address by doing some manufacturing, assembly, distribution, support within those countries.


Edited by Dick Applebaum - 1/10/13 at 10:07am
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post #63 of 95
Quote:
Originally Posted by jasenj1 View Post

Audi, BMW, and Mercedes are not interested in the low-end of the car market. And it would hurt their brands if they went after that market.
That is patently untrue. All three of those manufacturers have "budget" models designed to get the less affluent into their products. In case you haven't noticed, the majority of the cash in the world today is in fewer hands than it was only a decade ago. That means fewer rich people to buy their brands, which means fewer cars sold, which means fewer profits. If you don't think the European luxury automakers aren't well aware of the Lower-priced Asian luxury brands breathing down their necks and aren't doing something about it, then you aren't looking.

While I don't agree about the price tag these analysts are slapping on such a product, I didn't agree about the price tag they were slapping on the iPad mini either. Turns out they were wrong about that as usual, but not about the product itself. Just because Apple would never price a product that low doesn't mean they shouldn't address the market for one.

Like the car manufacturers Apple has to worry about the future. While they are selling a high-end product, their longevity rests on the expansion of their ecosystem, something that could be severely curtailed by a generation or two of Android adopters investing in Google's ecosystem instead.
post #64 of 95
Quote:
Originally Posted by allenbf View Post

Apple should offer a trade in program, with a credit toward a new phone; then sell the used phones off contract to these developing countries. Make $$ twice on each phone, the used phone at a lower margin.

 

Except all the used and broken iPhones are already used by Apple for stock replacements.  Every used iPhone that is returned to a store is sent back to Apple, reconditioned and then shipped back to the store for use as replacement units when you have a problem with your phone.  

 

So they basically have no "used" stock left to use for anything else, or to send to developing countries or whatever.  

They are already used for handset replacements. 

post #65 of 95
Quote:
Originally Posted by paxman View Post

I agree that Apple could make another phone. That phone would need to be substantially different such as in your example.

A cheap phone won't happen because if there is a cheap phone why would anyone buy the expensive one? If you get the same services just in a cheap package I suspect most people would go for the cheaper model because:
Apple's cheaper model would still be very nice (No way could Apple afford to make a really cheap and crappy phone that is so poor its not worth owning)
Apple's cheaper phone would have all the same services (Producing a limited iPhone would damage the Apple brand - clue: user experience)


There are high end product makers that make cheaper models but they tend to be really expensive, such as high end car manufacturers. But a phone is hardly in the same bracket. How many people would pay and extra $200.- just to have a nicer looking phone? I know, some people buy $200.- (and up) cases but I have personally never seen one. 

Makes no sense

People pay for the top end iPhone at the moment to get $40 worth of memory for$400.
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post #66 of 95
Quote:
Originally Posted by Ex iPhone Owner View Post

Apple should protect the brand as "elite" and not offer lower cost models.  What they should do is make a model with a larger screen size!  5" would be perfect.

 

I'm not sure if 5" is perfect but after thinking about it I think you are absolutely right about protecting the "elite" tag of the brand by going after the larger smartphone market.

 

I was originally thinking 4.3" but I've bumped it up a bit to 4.5" and a small part of me says 4.65".

 

I think that a premium large phone would snag quite a few consumers that aren't considering an iPhone at present.

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post #67 of 95
Quote:
Originally Posted by jragosta View Post

If Apple introduces a low cost line of food products (perhaps rice and corn), they could address 99% of the eating market - which is larger than the phone market.

But that wouldn't make any more sense than getting into the cheap crapware phone market.

 

Apple should buy Frito-Lay or vice versa...

 

There is a difference between "cheap crapware" and "value at a good price"...

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post #68 of 95
Quote:
Originally Posted by jragosta View Post

If Apple introduces a low cost line of food products (perhaps rice and corn), they could address 99% of the eating market - which is larger than the phone market.

But that wouldn't make any more sense than getting into the cheap crapware phone market.

 

iSoft... a new line of toilet paper from Apple. True crapware.

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post #69 of 95
Here's a better translation of what Schiller said.

http://thenextweb.com/apple/2013/01/10/apples-schiller-says-that-despite-the-popularity-of-cheap-smartphones-they-will-not-be-the-future-of-apples-products/

Interviewer Huang Yinlong spoke to Schiller about Apple’s products in China who said that “every product that Apple creates, we consider using only the best technology available. This includes the production pipeline, the Retina display, the unibody design, to provide the best product to the market.”

“At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out,” Schiller added later. “Despite the popularity of cheap smartphones, this will never be the future of Apple’s products. In fact, although Apple’s market share of smartphones is just about 20%, we own the 75% of the profit.”
post #70 of 95
Quote:
Originally Posted by TBell View Post

Quote:
Originally Posted by gordy View Post

OMG, this again?  The iPhone 4, which runs rings around "free" phones, is $1 or less with a contract.

 

I think the tech media wags the dog with some of these stories.

 

 

True, but the prepaid and no contract markets are big. There you have to pay for the phone outright. 

 

One way to address prepaid and no contract markets is for:

  • Apple to become a MVNO in those markets -- if needed
  • sell unlocked phones through the iTMS -- financed as needed
  • sell monthly Apple (or carrier) prepaid service through the iTMS

 

Based on the existing technology, Apple has the ability to minimize the risk by disabling the iPhones as necessary -- or tying them to Approved Apple services only.  Say, you buy an unlocked iPhone -- financed by Apple.  That iPhone would work on Apple's MVNO (for a monthly fee) or other approved (by Apple) carriers -- where Apple gets a piece of the carrier's monthly fee until the iPhone financing is paid off.

 

Apple could adjust these offerings country by country as needs dictate.

 

I can see this as a win-win-win...

  • Customer gets the best smart phone/ecosystem at a low entry price and a low monthly price
  • Apple gets the iPhone sale, financing, MVNO fees, App and Content fees
  • Carriers get profitable customers delivered to their network (as an MVNO provider or carrier) with no subsidies or contracts
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post #71 of 95
Quote:
Originally Posted by NotScott View Post

Apple to Release Mini Sticky "iBuns"

by Gene Munster

 

While Cinnabon owns first-to-market position for small to mid-size cinnamon rolls, a sizable untapped market remains for high-quality, premium priced sticky buns in the United States and abroad. THEREFORE, BEYOND ANY DOUBT, tech giant Apple will add iBuns to its expanding ecosystem.

 

"Existing Apple customers will be able to easily find iBuns from their favorite Apple Store locations or by using GPS on their iOS device, and request them online for in-store pick up" said no one. Additionally, use of iBuns will expand Cupertino's audience further into the diabetes market - known to be heavy tech users.

 

"It's a no-brainer. Apple will do this. I have bet my children's future on this fact. It's guaranteed."

 

LOL!   I don't care if your name is Apple -- get your sticky buns off my desk!

 

Now, Have you seen the muffin man... He lives on Drury Lane?

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post #72 of 95
Quote:
Originally Posted by asdasd View Post

Quote:
Originally Posted by paxman View Post

I agree that Apple could make another phone. That phone would need to be substantially different such as in your example.

A cheap phone won't happen because if there is a cheap phone why would anyone buy the expensive one? If you get the same services just in a cheap package I suspect most people would go for the cheaper model because:
Apple's cheaper model would still be very nice (No way could Apple afford to make a really cheap and crappy phone that is so poor its not worth owning)
Apple's cheaper phone would have all the same services (Producing a limited iPhone would damage the Apple brand - clue: user experience)


There are high end product makers that make cheaper models but they tend to be really expensive, such as high end car manufacturers. But a phone is hardly in the same bracket. How many people would pay and extra $200.- just to have a nicer looking phone? I know, some people buy $200.- (and up) cases but I have personally never seen one. 

Makes no sense

People pay for the top end iPhone at the moment to get $40 worth of memory for$400.

 

Ha!  It's just a variation of an old joke...

 

He:  "Will you sleep with me, for $1 million?"

 

She: "Sure!"

 

He:  "How about for $50?"

 

She: "What do you think I am?"

 

He:  "Madam, we have already established what you are -- we're just negotiating a price!"

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post #73 of 95
Quote:
Originally Posted by Tallest Skil View Post

There's a reason we don't want Apple to be everything. I'm sorry you don't know why that is, but it's also the reason Apple has ever been successful.

Apples success is recent , not Mac dependant and came about firstly with the iPod which is a cheap device which covers all angles.
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post #74 of 95

Apple "would", but they won't.


Originally Posted by asdasd View Post
Apples success is recent , not Mac dependant and came about firstly with the iPod which is a cheap device which covers all angles.
 

And yet they make the big money when they don't do that.

Originally posted by Relic

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post #75 of 95
Forums: giving voice to niche market interests.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #76 of 95
Quote:
Originally Posted by Tallest Skil View Post

Apple "would", but they won't.
And yet they make the big money when they don't do that.

They won't lose any money by extending the iPhone line. People who now buy the normal iPhone will continue to for many reasons, the US subsidy, better screen and battery, LTE, better look, and for status reasons.

Many iPhone buyers buy the top model too. The brand is no more compromised by a cheaper alternative which looks good than the iPod touch is by the nano.
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post #77 of 95
Quote:
Originally Posted by Suddenly Newton View Post

Forums: giving voice to niche market interests.


Which niche market would that be?

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post #78 of 95
Quote:
Originally Posted by asdasd View Post


Apples success is recent , not Mac dependant and came about firstly with the iPod which is a cheap device which covers all angles.

 

Actually, Apple had success twice before the iPod with the initial release of the Apple computers in the late 70s and then again under the sugar water salesman from mid 80s to early 90s... and then it went away until Steve came back.


Edited by island hermit - 1/10/13 at 11:53am
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post #79 of 95
Quote:
Originally Posted by gwmac View Post

Most of the world by a very wide margin have to buy their phone outright. They don'y have the choice to get a free or $99 older iPhone modell. They currently would have to shell out around $450 to get even an older model iPhone. 

 

Even here in the U.S. if you added up the total subscribers for all the pre-paid carriers like Pageplus, straight talk, Boost, Virgin mobile, Ting, etc. not to mention the pre-paid customers from the big carriers themselves, that would be a pretty large number of people. Probably 50 million or more in fact. Why not offer 65% of the world an affordable iPhone?


Yes, offering a lower cost iPhone for demographics where customers must buy the phone outright is a no-brainer!

However, isn't that specific demographic relatively small?  If small, it doesn't surprise me that Apple is not addressing that market YET.

 

(for the U.S. anyway) an article like this one that does not address the total cost of ownership (i.e. monthly data/voice/text contract payments) is IDIOTIC.

 

Bottom line: Apple will address the lower end, but will address it not by proclaiming how cheap it is, but how it serves a completely new audience with the quality that Apple is known for.  This new audience will be: pre-teens (and their parents), blue collar workers (and their employers), lower middle class, and those that also want cheaper monthly data plans (which U.S. networks will offer since this new device will be a smaller form factor and/or with crippled features).

post #80 of 95
Originally Posted by asdasd View Post
They won't lose any money by extending the iPhone line.

 

Not about losing money; about making enough money for the work done.


Originally Posted by island hermit View Post
Which niche market would that be?

 

Don't play dumb.

Originally posted by Relic

...those little naked weirdos are going to get me investigated.
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Originally posted by Relic

...those little naked weirdos are going to get me investigated.
Reply
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