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Apple likely to debut $199 iPhone as low-cost smartphone market hits $135B in 2013 - Page 2

post #41 of 70
Quote:
Originally Posted by Tallest Skil View Post

Just have Apple buy the entire low-cost smartphone market and shut it down. 1wink.gif

And no, it's no more "likely" now than when you analysts lied about it in the first place. I definitely see a $299 off-contract iPhone as possible, but $199 creates a problem of both profit and manufacturing.

I agree, You eventually reach a point where it's just not worth it. Say they do make a dirt cheap iPhone, what then? If it is too nice, no one will buy the more expensive ones. If its too cheap it tarnishes the brand. They will have more market share but is the trade off worth it to them? We'll just have to wait and see.
post #42 of 70
Quote:
Originally Posted by Tallest Skil View Post

 

MANY people here think they're going to completely abandon the reinvention of the phone that they did six years ago? Really? Many of them. Many people think that Apple will abandon the App Store and all its developers and revenue for the sake of a "feature phone". Really. 

 

So that's two; gotta have at least four for "many".


There are at least 4...happy?

Go and count.

To be fair, I also said that many adamantly oppose which you did not quote.

...and that's my whole point, many of you are so vocal (defined by number of posts in a day) that it clouds the FACT that many others disagree with you.  In essence, I'm encouraging more to speak their mind in logical ways even if it means having to put with your antagonistic, yet shallow post (as I have quoted above).

 

Back on subject...how can you be so sure of yourself that Apple will abandon the App Store for the sake of a feature phone?...that will only happen if the feature phone completely cannibalizes the iPhone.  If the majority is additive, then it wouldn't "abandon" the App store, wouldn't you agree?

post #43 of 70
Quote:
Originally Posted by gwmac View Post

They sell an iPod touch at a profit for $199, why not an iPhone? Reduce memory to 8GB instead of 16GB, smaller screen back down to 3.5" along with a plastic exterior and it could be done. Basically an updated, slimmed down 3GS with lightning connector in multiple colors. I am not saying Apple will or should do this, but I can at least see that it is feasible if they so chose. I think a much more likely price would be $249 to as high as $299 for such a phone. Even in this cheaper market segment Apple would still rather be the premium brand.

There are valid reasons for and against this move but I tend to side with Gene on this one. No reason to completely abandon a $135B market. Many of those people buying cheap phones today will buy flagship models in the future so why not get them into the Apple ecosystem and familiar with iOS now. It would also be popular for children and people without contracts or subsidies in developed countries as well. The shuffle didn't destroy the iPod brand, the mini didn't cause irreparable harm to Macintosh line and neither would a more affordable iPhone.

If Apple feels it can make a comfortable profit then they will enter the market. I don't agree with your iPod/iMac analogies because the cheaper variants are lacking in some ways compared to the more expensive ones. The shuffle and mini both lack a screen for example. A cheaper iPhone would have to be able to do everything the more expensive one can do, albeit slower, or it could turn future upgraders off. If Apple has the appetite for the reduced profit margins or has found the right mix of quality/cost to retain current margins then it would be a go, but not because of these blow hard analysts.
post #44 of 70
Originally Posted by drewys808 View Post
There are at least 4...happy?

Go and count.

 

Who? That's sort of the idea I was going for. It doesn't matter. Forget it. 


Back on subject...how can you be so sure of yourself that Apple will abandon the App Store for the sake of a feature phone?...that will only happen if the feature phone completely cannibalizes the iPhone.  If the majority is additive, then it wouldn't "abandon" the App store, wouldn't you agree?

 

By virtue of making a feature phone, they will be running contrariwise to their past six years of ludicrous success. Doesn't matter how well the device does (and it wouldn't); the existence of such a device is the opposite of the point Apple made when the first iPhone was announced.

post #45 of 70
Quote:
Originally Posted by iSteelers View Post


I agree, You eventually reach a point where it's just not worth it. Say they do make a dirt cheap iPhone, what then? If it is too nice, no one will buy the more expensive ones. If its too cheap it tarnishes the brand. They will have more market share but is the trade off worth it to them? We'll just have to wait and see.


Listen, I agree with you and TS on this...a dirt cheap iPhone is not in the cards.  But a value-conscious, high quality feature phone is not in the same category as dirt cheap.  And allow me to clarify, I'm not against Apple waiting to enter this market.  Risk is greater than reward for this form factor.

 

I'd rather see innovation in the iPhone first... an improved iPhone 5 and also a larger screen/high grade iPhone as well this year.

post #46 of 70
Quote:
Originally Posted by OllieWallieWhiskers View Post

plastic doesn't mean cheap or ugly. apple has made several plastic products and none of them were particularly ugly. iMac G3/G4/G5/early Intel, PowerMac G3/G4/Cube, iBooks, most of the MacBooks, the AirPort line, AppleTV, many of the earlier iPods were half plastic.

All of these are/were great looking products. aside from the early MacBook's cracking palmrest, quality was top notch.

But Apple has moved away from these materials in all of their product designs. That would have to be a pretty lucrative market for them to go back to them again. And by lucrative I mean profit not revenue.
post #47 of 70
Quote:
Originally Posted by Tallest Skil View Post

By virtue of making a feature phone, they will be running contrariwise to their past six years of ludicrous success. Doesn't matter how well the device does (and it wouldn't); the existence of such a device is the opposite of the point Apple made when the first iPhone was announced.

Yes, there is a contrasting and perhaps even a compromising factor in all of this.  I agree there is risk in introducing this form factor.

 

This market landscape is new and ultra-competitive, that's reality.  In response to this reality, the risk/reward battle rages internally for Apple (in my opinion) including the feature phone form factor argument.  A new form factor brings with it a whole new list of trade-offs... risk/reward tradeoffs included.  If the "opposite" can be defined, marketed, and sold to a new customer base...then reward will overwhelm risk.

post #48 of 70
Quote:
Originally Posted by gwmac View Post

I hear what you are saying but offering plastic is more than just about cost. It also clearly differentiates the lines. I disagree with the decreased durability and sturdiness of plastic though. I think the the 3GS is probably more sturdy and durable than the 4. I also fail to see how using plastic necessarily reduce space inside the phone either. It might make it slightly more bulky on the outside but people expect compromises when paying significantly lower prices. But I think the main reason to avoid aluminium is clear product separation although multi-colored aluminium or other metal would also offer that as well. 

 

You're probably right about plastic differentiating the lines, though I'd have to point out that Apple, at least so far hasn't really had multiple lines of products, they seem to mainly have the one line - premium.  The only thing resembling multiple lines is previous generation products, but I don't recall the last time two products were introduced with one marketed as a premium line over the other.  But who knows, things may change in the future.

 

As for the sturdiness of the 3GS, sturdier than the 4 maybe, not the 5.  And that's really mainly because the back glass was prone to cracking but I think the assembly as a whole was sturdier.

 

Like I said, plastic will either make the phone bulkier and/or reduce the internal space if attempting to use the same external size as an aluminum case.  There's no way around this, plastic can't be made with the thickness and tolerances that aluminum can, and if given a choice what would you rather have, more plastic or more battery?  I suppose they could offer less battery life in a cheaper iPhone line with plastic case, but it hardly seems worth the trouble just to differentiate the lines.  I think I like the other idea mentioned in this thread better which was to use a case similar to an iPod touch - it avoids the bulkiness and it also clearly differentiates the lines.  It's just that I see this plastic iPhone idea mentioned so often, and no matter how you spin it, it doesn't make much sense to me.

post #49 of 70
Quote:
Originally Posted by gwmac View Post

I just don't see Apple releasing any phone that will not be part of the iTunes revenue stream for apps and music. I think there actually is room for a completely new product category that blurs the line between feature and smart phone. That Sharp phone I linked for example with a real CCD camera hints at what is possible for such a phone that wants to stress exceptional photographs and video as a selling point. I just don't see Apple as the company that would do it and perhaps Sony Ericson, Nokia, Sharp, or some others who have been squeezed out by Apple and Samsung might view it as a lifeline they could do well in. But my opinion is no more valid than yours and I like your outside thinking. Certain people here think they are appointed by the oracle of Delphi in terms of knowing what Apple should or should not do and forget that this is just an opinion board that no Apple executive or analyst for that matter will ever read. 

I agree.   a phone that is not fully integrated into the ITMS/iCloud ecosystems is not an iPhone, and doesn't drive the 'halo.'   When the Shuffle, nano, and all the low cost iPods were announced, they were all still fully integrated into the ITMS environment at that time.

 

In short, a phone that is not 'smart' cannot be part of the iOS ecosystem.   And a phone that doesn't include standard iOS apps, and iCloud/ITMS capabilities is not 'smart.'   Ergo, not an iPhone (all apple phones are smartphones.).

 

Apple isn't about making profits  'today,'  it's about moving (herding) the market to an 'insanely great' user experience that wraps acquisition and consumption of consumer/corporate media,content,apps into a seamless/intuitive/compelling set of devices/OSes/backend services.  if they do that, then the profits take care of themselves.   

 

my opinion... YMMV.

post #50 of 70
Quote:
Originally Posted by drewys808 View Post

Yes, there is a contrasting and perhaps even a compromising factor in all of this.  I agree there is risk in introducing this form factor.

 

This market landscape is new and ultra-competitive, that's reality.  In response to this reality, the risk/reward battle rages internally for Apple (in my opinion) including the feature phone form factor argument.  A new form factor brings with it a whole new list of trade-offs... risk/reward tradeoffs included.  If the "opposite" can be defined, marketed, and sold to a new customer base...then reward will overwhelm risk.

I don't see the feature phone landscape as 'new'  - it is ultra competitive, due to the low cost of entry, and demand by the consuming public.  However, it's a spiral to commodity, and Apple doesn't do commodity.   

 

I don't see a 'new customer base' existing in feature phones. it's just those that can't/won't/shouldn't jump the chasm to smart phones.  There is no reward in capturing that market if the product that you sell to them doesn't have a hook to drive them to your core set of products.  And a feature phone (one that is not smart), has very little stickiness (about the only thing would be the contact list) to the iOS marketplace.  hardly a compelling motivation to stay within the ecosystem.  Ergo no reward.  

 

Therefore, a low cost feature phone would not have any impact on future profits (movement to the true iPhone space), and the cost of maintaining relevancy in the space would be the race to the bottom commodity war.   ergo all risk.

 

It's a non starter argument.  no reward (odds of migration to iOS vs other smart phones remains the same), all risk (to remain competitive, you have to spend money and/or lower margins to maintain share).

post #51 of 70
Well the iPhone 4 is externally the same as 4S and no lacked features from either the 4S or 5 so they could have it eventually $0 for 4, $50 for 4S, $100 for 5, $150 for 5S, $200 for 6 with all 2 or 3 memory option and without contract $100 price options, so get $850 for highest option or $250 for lowest option so let me repeat a contract less IPhone with latest OS.
post #52 of 70
Apple will release a low cost iPhone at the same time it releases a Netbook.
post #53 of 70
Quote:
Originally Posted by jungmark View Post

Apple will release a low cost iPhone at the same time it releases a Netbook.

I don't think those comments can be combined like that. Netbook is a fairly well defined device whilst "low-cost" is ambiguous. The iPhone 4 still being on the market and having a US price of $450 is definitely a lower cost than years prior. If you mean, $199 as "low-cost" I'd say that isn't likely to happen this year or in a few years as the 2010 3.5" iPod Touch with a TN display is $199 for the 8GB model.

I do think Apple could likely swing a special phone for China Mobile that will be considerably cheaper than the iPhone 4 is today but I'd think they want to isolate that device to that one network, at least for a year or two.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #54 of 70
Quote:
Originally Posted by drewys808 View Post


Listen, I agree with you and TS on this...a dirt cheap iPhone is not in the cards.  But a value-conscious, high quality feature phone is not in the same category as dirt cheap.  And allow me to clarify, I'm not against Apple waiting to enter this market.  Risk is greater than reward for this form factor.

I'd rather see innovation in the iPhone first... an improved iPhone 5 and also a larger screen/high grade iPhone as well this year.

A feature phone is not an iPhone. The iPhone is Apps and the Internet. Without those, you might as well stay home. Apple gets into profitable markets. If anything, Apple may repackage the 4 with Al rather than glass.
post #55 of 70
Quote:
Originally Posted by SolipsismX View Post

I don't think those comments can be combined like that. Netbook is a fairly well defined device whilst "low-cost" is ambiguous. The iPhone 4 still being on the market and having a US price of $450 is definitely a lower cost than years prior. If you mean, $199 as "low-cost" I'd say that isn't likely to happen this year or in a few years as the 2010 3.5" iPod Touch with a TN display is $199 for the 8GB model.

I do think Apple could likely swing a special phone for China Mobile that will be considerably cheaper than the iPhone 4 is today but I'd think they want to isolate that device to that one network, at least for a year or two.

I meant cheap plastic crap with hardly any profit.
post #56 of 70
Quote:
Originally Posted by TheOtherGeoff View Post

I don't see the feature phone landscape as 'new'  - it is ultra competitive, due to the low cost of entry, and demand by the consuming public.  However, it's a spiral to commodity, and Apple doesn't do commodity.   

 

I don't see a 'new customer base' existing in feature phones. it's just those that can't/won't/shouldn't jump the chasm to smart phones.  There is no reward in capturing that market if the product that you sell to them doesn't have a hook to drive them to your core set of products.  And a feature phone (one that is not smart), has very little stickiness (about the only thing would be the contact list) to the iOS marketplace.  hardly a compelling motivation to stay within the ecosystem.  Ergo no reward.  

 

Therefore, a low cost feature phone would not have any impact on future profits (movement to the true iPhone space), and the cost of maintaining relevancy in the space would be the race to the bottom commodity war.   ergo all risk.

 

It's a non starter argument.  no reward (odds of migration to iOS vs other smart phones remains the same), all risk (to remain competitive, you have to spend money and/or lower margins to maintain share).


The feature phone, for Apple would be new.  I did not mean that feature phones are new.

 

Really, you don't see a 'new customer base' for Apple in feature phones?  If you can't see that, you're blind and I am unable to continue this conversation.

 

Yes, there will be a "hook".  There will be an innovative feature that will differentiate it from other feature phones.  I agree with you on that....no hook, no feature phone.

post #57 of 70
Quote:
Originally Posted by jungmark View Post


A feature phone is not an iPhone. The iPhone is Apps and the Internet. Without those, you might as well stay home. Apple gets into profitable markets. If anything, Apple may repackage the 4 with Al rather than glass.

Yes, there's a high probability that Apple will continue selling an older model (like iPhone 4/4s possibly tweaked) to bring down cost.

Not sure what the whole point is in saying a feature phone is not an iPhone.  The first iPad was a computer without word processing, spreadsheet software, and many other computer-like features, so what?

 

...and many of you are forgetting that the cost of ownership (in most countries anyway) is much greater for smart phones due to higher cost data plans (for smart phones).  Feature phones eat up much less data, thereby lowering the cost of ownership.  A feature phone ensures the owner that data costs will be low...which isn't evident to consumers in an iPhone 4/4s/5/etc.

 

I can't stress this enough, I'm not saying that a feature phone is inevitable...it's just that so many here use dismissive repartee than relevant logic.  Not all, but many. :-)

post #58 of 70
Quote:
Originally Posted by drewys808 View Post


The feature phone, for Apple would be new.  I did not mean that feature phones are new.

Really, you don't see a 'new customer base' for Apple in feature phones?  If you can't see that, you're blind and I am unable to continue this conversation.

Yes, there will be a "hook".  There will be an innovative feature that will differentiate it from other feature phones.  I agree with you on that....no hook, no feature phone.

Apple creates product to garner the most profit. It doesn't create product to expand market share. Unless they get $200 margins for a "low-end" iPhone, it's not going to happen.
post #59 of 70

Plastic is in many ways the ideal component to manufacture a handheld device.  

 

-Cheap

-easy to manipulate and shape

-works with antennas 

-does not scratch

-can be flexible and durable

-Light weight

 

the negatives are....it feels cheap.

 

The idea that a phone is cheap because it is made out of plastic is a odd one. considering the other popular materials have huge drawbacks, glass cracks and shatters, Aluminum scratches and scuffs easily (but much better then glass) 

post #60 of 70
Quote:
Originally Posted by drewys808 View Post

Yes, there's a high probability that Apple will continue selling an older model (like iPhone 4/4s possibly tweaked) to bring down cost.

Not sure what the whole point is in saying a feature phone is not an iPhone.  The first iPad was a computer without word processing, spreadsheet software, and many other computer-like features, so what?

 

...and many of you are forgetting that the cost of ownership (in most countries anyway) is much greater for smart phones due to higher cost data plans (for smart phones).  Feature phones eat up much less data, thereby lowering the cost of ownership.  A feature phone ensures the owner that data costs will be low...which isn't evident to consumers in an iPhone 4/4s/5/etc.

 

I can't stress this enough, I'm not saying that a feature phone is inevitable...it's just that so many here use dismissive repartee than relevant logic.  Not all, but many. :-)

 

The problem is you don't understand that iOS would have to be almost ( if not exactly) as powerful under the hood to run Videos, Music, Safari, Maps, et al. The underlying API  (with some lower level additions) used by Apple internal devs is largely the same as external devs. So the OS has to be as powerful. Why would they then not have an iTunes store, or an App store? 

 

If by feature phone you mean "cheaper iPhone running full ( or mostly full*) iOS" then thats a different argument.

 

 

* ( bearing in mind that they may exclude some items like Siri)


Edited by asdasd - 2/21/13 at 7:54am
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post #61 of 70
Quote:
Originally Posted by jungmark View Post


Apple creates product to garner the most profit. It doesn't create product to expand market share. Unless they get $200 margins for a "low-end" iPhone, it's not going to happen.

Apple never says that. They say they try to produce the best product at whatever price points, not the best profit. The margins are something the "street" worries about, not the general Apple designer, or worker.

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post #62 of 70

Okay so it's a 135B$ market? So how much PROFIT is available in that "market"? From the numbers seen so far not all that much given Apple's profit share: 20% of the overall smartphone market, 70% of the profits.....

post #63 of 70
Quote:
Originally Posted by jungmark View Post


Apple creates product to garner the most profit. It doesn't create product to expand market share. Unless they get $200 margins for a "low-end" iPhone, it's not going to happen.


Poor logic... since one can target the most profit by expanding market share.

Your $200 margin is random.  Why wouldn't $100 margin @ 200 million a year garner profit?

post #64 of 70
Quote:
Originally Posted by asdasd View Post

Apple never says that. They say they try to produce the best product at whatever price points, not the best profit. The margins are something the "street" worries about, not the general Apple designer, or worker.

If they don't want the "best profit", what don't they sell it for cost or low profit margins.
Quote:
Originally Posted by drewys808 View Post


Poor logic... since one can target the most profit by expanding market share.
Your $200 margin is random.  Why wouldn't $100 margin @ 200 million a year garner profit?

But the low end will eat away at the "flagship" iPhone. And if profit margins are too low, you won't grow. Say 2 people were considering the 5 but instead choose the low cost one. The margins on the 5 is 300; 100 for the low. Instead of earning 600 they get 200.
post #65 of 70
Quote:
Originally Posted by asdasd View Post

 

The problem is you don't understand that iOS would have to be almost ( if not exactly) as powerful under the hood to run Videos, Music, Safari, Maps, et al. The underlying API  (with some lower level additions) used by Apple internal devs is largely the same as external devs. So the OS has to be as powerful. Why would they then not have an iTunes store, or an App store? 

 

If by feature phone you mean "cheaper iPhone running full ( or mostly full*) iOS" then thats a different argument.

 

 

* ( bearing in mind that they may exclude some items like Siri)

 

Basically, I'm thinking that the OS would be similar to the iPod Nano, but with addition of email, camera, phone, text messaging...and of course, with a different form factor to accommodate a type of keyboard/keypad.

 

This is not an easy task by any means, especially to make it apple-esque... including a "hook" (as some have mentioned here), a high quality finish, and superior operability, etc.

post #66 of 70
Quote:
Originally Posted by jungmark View Post


But the low end will eat away at the "flagship" iPhone. And if profit margins are too low, you won't grow. Say 2 people were considering the 5 but instead choose the low cost one. The margins on the 5 is 300; 100 for the low. Instead of earning 600 they get 200.

There will be some cannibalization and yes, it is a real challenge for Apple and always has been.

By my surveying, of those considering a purchase of an iPhone 5....only 1 in 5 would CONSIDER buying a low end (feature phone) instead of the iPhone 5... and of those, 40% were doubtful, 40% were on the fence and 19% were most likely...1% filled out my questionnaire incorrectly.

 

Oh yah... and don't forget to add the hundreds of millions of people outside your Venn diagram who are not and will not consider the iPhone 5.

post #67 of 70
Quote:
Originally Posted by jungmark View Post


Apple creates product to garner the most profit.

Absolutely untrue. Apple creates products that meet their criteria for innovation, quality and their standards for user experience. The profit part comes afterward.

 

 

Quote:
Originally Posted by jungmark View Post


If they don't want the "best profit", what don't they sell it for cost or low profit margins.
 

 

There is something fundamentally missing in your thinking process. Either that, or you're explaining yourself poorly.

post #68 of 70
Quote:
Originally Posted by stelligent View Post

Absolutely untrue. Apple creates products that meet their criteria for innovation, quality and their standards for user experience. The profit part comes afterward.



There is something fundamentally missing in your thinking process. Either that, or you're explaining yourself poorly.

I am explaining it incorrectly. They make the best products with high margins for the most profit. Somehow a cheapie plastic is not going to deliver "best in class" or "high margins".
post #69 of 70
Quote:
Originally Posted by jungmark View Post


I am explaining it incorrectly. They make the best products with high margins for the most profit. Somehow a cheapie plastic is not going to deliver "best in class" or "high margins".


That's a different issue.

 

I coulda posted this on the Katy Huberty thread...in that article, Katy mentions that the iPhone 4 is doing so well, so she suggests an iPhone "mini" (a cheap smart phone).  What?!  In this case I wholeheartedly disagree with the iPhone mini concept....making a cheap iPhone look-alike would hurt Apple way more than help it, and would slowly be the demise of great Apple products.

 

So instead of a cheap/plasticky new iPhone (mini)...I'd rather Apple just keep the iPhone 4s in the mix when the iPhone 5s (and/or 6) comes out.  It may be $150-$200 less than the iPhone 5s/6 which is attractive enough for most to consider, maintains good margins (even if it cannibalizes the newer models), and maintains the high quality of fit/finish/customer satisfaction.

 

I guess the only thing to consider here is whether Apple could do something to the iPhone 4s to bring COGS down even further (other than plastic or other things that the majority of people see as crap).  I'm not saying plastic is always crap, just that the perception that a flimsy plasticky phone is crap.

post #70 of 70
Quote:
Originally Posted by drewys808 View Post




I guess the only thing to consider here is whether Apple could do something to the iPhone 4s to bring COGS down even further (other than plastic or other things that the majority of people see as crap).  I'm not saying plastic is always crap, just that the perception that a flimsy plasticky phone is crap.

Exactly. They have the 4/4s so they don't need to intro a new cheapie.
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