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Rumor: Apple to drop iPhone 5 in favor of 'iPhone 5S' and 'iPhone lite' - Page 2

post #41 of 114

This makes a lot of sense, particularly with the structure of having a two-tiered polycarbonate model + premium model (5s), and will address many psychological aspects of iPhone purchasing:

 

-Emphasize and point out the "pro" aspects of the iPhone 5s, increasing premium feel, exclusivity, and incentivizing the upsell from the polycarbonate iPhone (especially as there won't be a black version of the polycarbonate variety). 

-People who want a new phone but "don't need" the iPhone 5s (in my experience there are a lot out there that think like this).

-People who can can only afford the cheapest phone, but won't feel insecure about this, as it will be outwardly indistinguishable from the higher end polycarb iPhone.

-It allows Apple to diversify the line up (thus allowing people to chose a version/color compatible with their sense of identity), while maintaining its characteristic simplicity/focus.

-Parents don't want to give their kids luxurious aluminum and glass phones for them to stomp on at a Justin Beiber concert.

 

It also makes sense economically:

 

-Improved margins compared to selling the 5 and 4s (polycarb will be easier to manufacture and will benefit from larger scale pricing of homogeneous components).

-This year's mid tier poly carb iPhones will be next year's refurbs, thus covering the budget of the vast majority of worldwide smartphone buyers.


Edited by PatchyThePirate - 7/24/13 at 4:11pm

   

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post #42 of 114
Quote:
Originally Posted by Crowley View Post

lol.gif    Good bait.

Normaly a name war is a popcorn event. So far its pretty quiet on that subject.
post #43 of 114
Quote:
Originally Posted by Tallest Skil View Post


Because they weren't, probably.


lol, you're too much.

Actually the reality is they have. 20% overall according to yesterday's report.

post #44 of 114
Quote:
Originally Posted by Gazoobee View Post

That's why I keep hoping this is a $200 off-contract phone.  If it isn't, Apple is entering into a world of complexity and confusion like never before with their product lineup.  At minimum, it would give them three iPhone models this year (no change) and four each year for the years after that (or more). 

A world of complexity on a 3 models line up? So the macbook line is a world of complexity too?
post #45 of 114
Maybe someone else said it already and I missed it...

But what's dumb about that reasoning is that the touchscreen tech is not suitable for low volume production. Well it wouldn't. The S versions are always the same form factor and screens and the previous generations, with just internal upgrades like processor and memory chips, cameras, etc.

Following their history, the 5S screen will be the same as the 5 so there will be no "Low Volume" because the 5S will keep the volume up. Then by next year the production costs should be lower.

This doesn't make any sense.
post #46 of 114
Quote:
Originally Posted by PatchyThePirate View Post

This makes a lot of sense, particularly with the structure of having a two-tiered polycarbonate model + premium model (5s), and will address many psychological aspects of iPhone purchasing:

 

-Emphasize and point out the "pro" aspects of the iPhone 5s, increasing premium feel, exclusivity, and incentivizing the upsell from the polycarbonate iPhone (especially as there won't be a black version of the polycarbonate variety). 

 

 

 

I have notice that too.  There will be no low cost iphone that looks like the high end one. They really nailed that aspect of it. I am worry that the high end phone sales will drop hard, but we can already see they really taught about the image factor and the social aspect of it.  

post #47 of 114
Quote:
Originally Posted by Ingela View Post

Actually the reality is they have. 20% overall according to yesterday's report.

20% what overall?

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

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post #48 of 114
Quote:
Originally Posted by Ingela View Post


lol, you're too much.

Actually the reality is they have. 20% overall according to yesterday's report.

 

20% which is definitely lower than the high end, but the unanswered question is whether Apple could produce a new, compelling iPhone "lite" at the lower price point which would attract consumer attention at the same or similar rate as the current offerings with a higher than 20% profit margin.  Do you know that they could do that?  The current rumours are predicated on that idea, but no one has any solid evidence that they can.

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post #49 of 114
Quote:
Originally Posted by christopher126 View Post

P.S. I must admit I was a little surprised to see just how much the iPhone contributes to Apple's business and also, how little the iPod is now contributing.

 

Wait until they get into wearable devices, you will see even more ipod sales drop.

post #50 of 114
Quote:
Originally Posted by Gazoobee View Post

 

They could also save money on production if there was only one model instead of multiple memory sizes, or if the manufacturing itself was simpler and therefore cheaper.  I agree it's kind of dubious, because to replace the current program of selling the old ones, the "iPhone lite" needs to be in the $200 range off contract and the starting price of a new iPhone is more like $700.  

 

So if it's a "mid-range" phone, then it isn't replacing the older iPhones, and they've just confused their line up with even *more* models.  If on the other hand it's a cheap iPhone to replace the older models thing, then it has to be so cheap as to make us wonder how the hell it can be that cheap.  

 

That's why I keep hoping this is a $200 off-contract phone.  If it isn't, Apple is entering into a world of complexity and confusion like never before with their product lineup.  At minimum, it would give them three iPhone models this year (no change) and four each year for the years after that (or more). 

That price would do away with the iPod Touch, but they may be trying to do that. 

 

I don't think they would go that low only because they want to be seen as at least a somewhat high end brand. $350 off contract is my guess. It's still $100 lower than the 4, it would give them a high enough margin, and they could say it's worth the cost because of the added benefit over the older models of either how much lighter or slimmer it is.

post #51 of 114
Quote:
Originally Posted by Crowley View Post

 

20% which is definitely lower than the high end, but the unanswered question is whether Apple could produce a new, compelling iPhone "lite" at the lower price point which would attract consumer attention at the same or similar rate as the current offerings with a higher than 20% profit margin.  Do you know that they could do that?  The current rumours are predicated on that idea, but no one has any solid evidence that they can.

 

Depends how they do it.  Did you see the plastic case video? The case will cost a lot less than the aluminum/glass/chrome one in both material and manufacturing.  I think the colour options will compensate the lost of deluxe materials and even appeal more to mid range consumers. They could also tweak the internals, maybe put a cheaper camera and lower the cost of some components.

 

Now they have 3 choices, they can drop the unlock price or just rise margins, or both.  The current gross margins are ip4 30%,  ip4s 40% and ip5 50%. I think since Apple expects to sell a lot more low cost phones, they will normalize margins on all low cost phones at 40%.  

 

The problem with offering something like the ip4 at low cost is it hurts margins. The lower you drive the price down, the more the shell cost compare to the rest of the components to a point it doesn't makes any sense.  Also since it was a high end model, maybe a few components are still to high end for the target segment. By repackaging and tweaking, they will put up a more appropriate product, lower the price and increase margins.

 

Also, according to some rumors, the low cost phones wont be made at Foxconn. Apple is setting up a completely new chain. They will be low cost phone specialist and workers will always be on those models years after years. Apple will have diversification at the same time.


Edited by herbapou - 7/24/13 at 4:48pm
post #52 of 114
Quote:
Originally Posted by Paul94544 View Post

This is such a load of nonsnense becauase Apple would put itself in the situation of having millions of unsold iPhone5's in the pipeline and on shelves which they would not be able to sell! Again the moron that thought this one up is a total dochebag and cannot see past his 80 IQ
Just like all those iPad 3s.....oh, wait....
post #53 of 114
This matches with my prediction.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #54 of 114
Quote:
Originally Posted by helia View Post

After almost three years (a bit less), 20% of sold iphones are iphone 4! Why on earth would apple want to stop production of 5?!

Why do you believe the rumor?

"Apple should pull the plug on the iPhone."

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

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post #55 of 114
Quote:
Originally Posted by herbapou View Post

Wait until they get into wearable devices, you will see even more ipod sales drop.

But what if they are wearable iPods?

"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 #56 of 114
Quote:
Originally Posted by Suddenly Newton View Post


But what if they are wearable iPods?

 

Funny thing is we had the nano wearable trend at some point, when it was a square.

post #57 of 114
Quote:
Originally Posted by jd_in_sb View Post


I should have said a lower cost iPhone 5S Lite might have *some* newer technology like a fingerprint scanner. But you're right, overall the iPhone 5S Lite would probably be less capable than an "older" iPhone 5.

Dude, one thing you can count on is that (if the flagship iPhone does indeed happen to have a fingerprint reader) the second tier iphone will definitely not have a fingerprint reader.
post #58 of 114
Quote:
Originally Posted by SockRolid View Post

Apple has all the numbers plugged into a Numbers spreadsheet somewhere in Cupertino.  Just my $0.02.  We'll see what happens.

Tim uses Excel. Just my $0.02.

Shut up and go away, you useless, pathetic FUDmonger - Tallest Skil
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Shut up and go away, you useless, pathetic FUDmonger - Tallest Skil
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post #59 of 114

iPhone 5 fit and finish is amazing and is labor intensive to assemble right? the flagship phone gets a premium sell price but the last gen phone doesn't, so if the last gen phone is just as labor intensive to assemble as the flagship but without the price premium, then ...

 

I was thinking of waiting for the iPhone 5 to be the old phone and get it cheaper, off contract yo, but whatever. 

post #60 of 114
Quote:
Originally Posted by SockRolid View Post

 

And the lower-cost iPhone could, in theory, allow Apple to stop production of old iPhones entirely.  This would reduce support overhead by eliminating the need to support 2 year old hardware with the latest version of iOS.  Right now, you can buy three different generations of iPhones, each with the latest iOS 6.x pre-installed.  Meaning Apple needs to test each release of iOS on three different generations of iPhone.  That costs money, and tends to slow down adoption of the latest hardware and software.

 

A lower-cost iPhone might replace previous years' high-end iPhone models.  Want a cheap iPhone?  Buy the latest "iPhone Lite."  It won't have all the features of the high-end model, so if the rumors of a fingerprint sensing screen are true, you probably would need to buy the high-end iPhone to get that.  (And it would be worth it.)  This scheme would allow to reduce production from three iPhone models to just two, and they would always be producing the current model of each line.  Each year the production lines would retool for the new model.

 

One trick to making this work would be to move last year's high-end iPhone components into this year's low-cost iPhone.  So the low-cost iPhone wouldn't require as much development effort.  So, this year, Apple would put the iPhone 5 components into the first low-cost iPhone.  And this year's new high-end iPhone would have some new hardware features (improved camera plus fingerprint sensing touchscreen maybe.)  Next year, the low-end iPhone would have some of this year's high-end iPhone components (camera) minus features that are high-end iPhone-only (fingerprint sensing touchscreen.)

 

So what about the "free" model?  The 2-year old iPhone that's $0 with carrier subsidy?  Apple might be able to sell two different "iPhone Lite" models: a 32GB model for $99, and another with 16 GB for $0.  There might never even be a "last year's iPhone" of either the high-end or low-cost model.

 

All of which would tend to allow Apple to move iOS ahead faster, without the burden of backward compatibility and/or testing on older model iPhones.  Apple could only allow each release of iOS to run on the current high-end iPhone and last year's high-end iPhone.  Of course, there's the matter of reduced economy of scale because each year's iPhone development costs would be amortized over only one year's unit volume.  And there would surely be some unhappy users who were accustomed to running the latest iOS on 2-generation old hardware.

 

Apple has all the numbers plugged into a Numbers spreadsheet somewhere in Cupertino.  Just my $0.02.  We'll see what happens.

+1

 

Best post I've seen on this topic so far.

post #61 of 114

On the earnings call one of the analysts asked why there was such a big drawdown on the channel for iPhone and iPod, and Tim hemmed and hawed and didn't really answer the question - maybe they are prepping for the new model.

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post #62 of 114
Ok what you guys are failing to see are the forest for the trees;

Let me explain, I still am using my iPhone 4 for several years now since it was released I was the crazy geek guy on line at the apple store waiting in line over night with my beach chair in SOHO NYC -

And my iPhone 4 still runs circles around every iPhone 5 user I know - APPLE knows they got it screwed up with this model the battery just doesn't last enough not to mention all the other issues the 5 had out the gate - it's a flawed design and apple knows it - why do u think BESTBUY & RADIO SHACK and all the carriers are basically offering this model so discounted??
Don't you remember when APPLE returned like over 5 million iPhone 5's back to FOXCONN (google it they reported on this site as well) these were defective units worth in the BILLION$!!
Apple knows they have a lemon so they aren't commissioning FOXCONN to build anymore and they are coming out with an improvement and that's the model I will get!! FYI
post #63 of 114
Quote:
Originally Posted by bitzandbitez View Post

APPLE knows they got it screwed up with this model the battery just doesn't last enough not to mention all the other issues the 5 had out the gate - it's a flawed design and apple knows it

Stop the FUD; I want to get off. Seriously.
Quote:
why do u think BESTBUY & RADIO SHACK and all the carriers are basically offering this model so discounted??

Because we're two months from the launch of the new one.
Quote:
Don't you remember when APPLE returned like over 5 million iPhone 5's back to FOXCONN (google it they reported on this site as well) these were defective units worth in the BILLION$!!

Not really, but that's probably me. Do you have any proof that actually happened?

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #64 of 114
you could've just googled it and read the 20 or 30 websites reporting on this story including FORBES. COM:

http://www.cultofmac.com/224383/foxconn-could-take-up-to-1-6b-hit-as-apple-rejects-5-8-million-defective-iphones-report/
post #65 of 114
Quote:
Originally Posted by bitzandbitez View Post

Ok
(But you could've just googled it and read the 20 or 30 websites reporting on this story including FORBES. COM but here is you homework:

http://www.cultofmac.com/224383/foxconn-could-take-up-to-1-6b-hit-as-apple-rejects-5-8-million-defective-iphones-report/

Yeah, I did, see. Except there's nothing in your article that proves anything. IN FACT THE ARTICLE SPECIFICALLY HAS A LINK TO FOXCONN'S DENIAL THEREOF.

So maybe before insulting me you could do what you demand of others.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #66 of 114
Quote:
Originally Posted by bitzandbitez View Post

And my iPhone 4 still runs circles around every iPhone 5 user I know


Battery life in the iPhone 5 is fine, and having access to the faster LTE data makes the phone way better.  It is thinner, with a bigger screen, cooler looking, etc.

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post #67 of 114
Quote:
Originally Posted by jd_in_sb View Post


Apple could simply sell the iPhone 5 at a discount until the pipeline and shelves are cleared. They have done this with other products.

 

 

Yes, like that is hard to understand.  I know somebody who would pick up one at a deal. 

post #68 of 114
Quote:
Originally Posted by bitzandbitez View Post



And my iPhone 4 still runs circles around every iPhone 5 user I know - APPLE knows they got it screwed up with this model the battery just doesn't last enough not to mention all the other issues the 5 had out the gate - it's a flawed design and apple knows it - why do u think BESTBUY & RADIO SHACK and all the carriers are basically offering this model so discounted??
Don't you remember when APPLE returned like over 5 million iPhone 5's back to FOXCONN (google it they reported on this site as well) these were defective units worth in the BILLION$!!
Apple knows they have a lemon so they aren't commissioning FOXCONN to build anymore and they are coming out with an improvement and that's the model I will get!! FYI

 

 

That is nuts. I too am using an iPhone 4. My long time girlfriend has an iPhone 5 that I use regularly. The iPhone 5 is the best phone I have ever touched. It is incredibly light, super fast in terms of processing power and data speeds, and beautiful to hold. I do not notice any difference in battery life UNLESS you do not manage carrier data settings. The iPhone 4 does not use LTE or 4G, whereas the iPhone 5 does. LTE uses more battery use. 

 

Moreover, my 3GS (also still in use) has better reception than the iPhone 4. The antenna is much improved in the iPhone 5 over the iPhone 4.  

 

Apple allegedly returned phones to Foxconn because Foxconn was shipping them to Apple with defects in the paint. 

post #69 of 114
Quote:
Originally Posted by Irving Muller View Post

That price would do away with the iPod Touch, but they may be trying to do that. 

 

I don't think they would go that low only because they want to be seen as at least a somewhat high end brand. $350 off contract is my guess. It's still $100 lower than the 4, it would give them a high enough margin, and they could say it's worth the cost because of the added benefit over the older models of either how much lighter or slimmer it is.

 

I think you may be right.  It seems I mixed up my numbers quite a bit there.  I'm going to blame it on the heat wave. 

post #70 of 114
@paul94544> "This is such a load of nonsnense becauase Apple would put itself in the situation of having millions of unsold iPhone5's in the pipeline and on shelves which they would not be able to sell!"

1) Why would they have millions of iPhone 5's sitting on the shelves if they stop making them?

2) Why would they be unable to sell them? Apple is still selling iPhone4S and iPhone 4 by the millions even today?
post #71 of 114
Quote:
Originally Posted by Paul94544 View Post

This is such a load of nonsnense becauase Apple would put itself in the situation of having millions of unsold iPhone5's in the pipeline and on shelves which they would not be able to sell! Again the moron that thought this one up is a total dochebag and cannot see past his 80 IQ

Apple doesn't keep months and months worth of products in their pipeline. They have 2 months left to sell the 5, if they stop producing now they would run out by September. Apple typically keeps 6-8 weeks worth of supply in their "pipeline." This isn't their first time selling the iPhone, they know the trend of sales and can prepare for it...

post #72 of 114
Quote:
Originally Posted by Paul94544 View Post

This is such a load of nonsnense becauase Apple would put itself in the situation of having millions of unsold iPhone5's in the pipeline and on shelves which they would not be able to sell! Again the moron that thought this one up is a total dochebag and cannot see past his 80 IQ

What are you on about? This isn't nonsense in the least. This move makes perfect sense for a variety of reasons:

First, it allows them to remove iPhone 4S from production earlier and ensure that all new sales have hardware inside that's using a 4" display and the A6 processor, and the plastic iPhone will be cheaper to produce than the 4S as well.

Additionally, a lot of consumers in subsidized markets passed on the iPhone 5 to get the cheaper 4 or 4S because they wanted an iPhone with premium build quality. The specs advantage of the iPhone 5 wasn't a salient feature. Now they have to make a harder choice between a plastic iPhone with last year's specs vs. an aluminum iPhone with this year's.

The excess iPhone 5's that were produced will more than likely be sold at some price between the going rate of the plastic iPhone and the 5S until the inventory is depleted.

In any event, your concern that excess iPhones will be stuck in the supply chain is a minor concern for Apple compared to the need to improve margins at the low end while also encouraging a greater % of consumers to buy the 5S rather than it's identical-looking but cheaper brother (iPhone 5).

The guy "with the 80 IQ" who came up with this is Tim Cook (or at the very least it was his decision to make in the end). And it's the perfectly logical move for Apple to make. I predicted this was their plan late last year when it became clear that Apple's margins were being crimped by the iPhone 4 & 4S cannibalizing iPhone 5 sales more than expected.
post #73 of 114
This makes sense if there is no new WOW feature or differentiator in the 5S versus the 5. The fingerprint sensor tech is significant if that's in there, but that's even more reason to drop the 5 since it doesn't have that. And if the new mid-priced iPhone also has that fingerprint sensor, then they would definitely drop the 5. Slimming down the iPhone line to just two models, each with a range of storage options (as smartly suggested by the poster "drewyboy", above, meaning not only the 4, but the 4S would be out) would have several big advantages. First, the fingerprint sensor could go in both new models allowing Apple to advertise the iPhone as being super secure without getting backlash from people complaining that the less wealthy folks out there somehow don't deserve tight security. Second, Apple could focus its economies of scale in both part sourcing and manufacturing around a common display size since the same 4" display would be used in the 5S, the mid-priced iPhone, and the latest generation iPod Touch. And all would also employ a similar sized case, meaning the battery form factor and other internal components could be designed for all three devices (with perhaps only a slimmer battery for the iPod Touch versus the two iPhones). Gone would be the two iPhone 4x models. Dumping both at the same time makes sense versus keeping the 4S around as the only 3.5" display device (economies of scale again). I'm thinking this is a great plan by Apple.
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I have enough money to last the rest of my life. Unless I buy something. - Jackie Mason
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post #74 of 114
Quote:
Originally Posted by brad6788 View Post

Apple doesn't keep months and months worth of products in their pipeline. They have 2 months left to sell the 5, if they stop producing now they would run out by September. Apple typically keeps 6-8 weeks worth of supply in their "pipeline." This isn't their first time selling the iPhone, they know the trend of sales and can prepare for it...

Only one month, actually - they shipped 31.2 million iPhones last quarter, and have 11 million (4 weeks) inventory in the channel.

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post #75 of 114
Quote:
Originally Posted by Tallest Skil View Post


Because they weren't, probably.

It was probably because in previous years the cannibalization of the latest iPhone wasn't nearly as significant as it has become since the iPhone 5 came out, so making the effort to develop a plastic phone wasn't worth the cost.  Making the move when the 5S is released lets Apple rid themselves of the iPhone 4/4S body of phones altogether and the 30-pin connectors for all future sales.

 

Also, with the iPhone 5 already being extremely fast and having LTE, Apple probably is concerned that cannibalization will be even worse this time around.  The 5S is likely to pack internal spec upgrades, and perhaps a fingerprint sensor, but for many an iPhone 5 at $100 would certainly be good enough.  Now the step-down product is a plastic phone...

post #76 of 114
Quote:
Originally Posted by hentaiboy View Post

Tim uses Excel. Just my $0.02.
I'm thinking he uses Open Office! LOL!
I have enough money to last the rest of my life. Unless I buy something. - Jackie Mason
Never own anything that poops. - RadarTheKat
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I have enough money to last the rest of my life. Unless I buy something. - Jackie Mason
Never own anything that poops. - RadarTheKat
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post #77 of 114
Quote:
Originally Posted by bitzandbitez View Post

And my iPhone 4 still runs circles around every iPhone 5 user I know - APPLE knows they got it screwed up with this model the battery just doesn't last enough not to mention all the other issues the 5 had out the gate - it's a flawed design and apple knows it - why do u think BESTBUY & RADIO SHACK and all the carriers are basically offering this model so discounted??

 

Having upgraded from an iPhone 4 to the 5 last year, I found the battery life of the 5 to be slightly better than the 4 with heavy use, and much better than the 4 with moderate use, or when connected to LTE and browsing the internet.  The CDMA iPhone 4 I had needed to expend much more power loading websites with its slower connection -- Anandtech's testing showed that the iPhone 5 consumes much less power than both the 4 & 4S when doing the same amount of work because it fall into its lower power mode much faster.

 

The only significant issues iPhone 5 had out of the gate were production issues with the anodization process, which were fixed by November.  There's nothing wrong with the internals of the device, or its battery.  In fact, the plastic iPhone will almost certainly use the exact same internal specs as the iPhone 5, in order to minimize hardware variance for developers.  

 

The reason the 5 has been discounted on occasion has been because sales can sweep up price-sensitive consumers who otherwise wouldn't have bought the phone, and getting any extra money for the 5 vs. the 4S or 4 (which many may have bought in the alternative) is worthwhile because the difference in production cost is minimal.  In fact, some have speculated that the 4S is now more costly to produce than the 5 thanks to its extra glass, while the SoC and modem cost differences are minimal.

post #78 of 114
Yes, the 30-pin connector bit. I hadn't even thought of that. That's another good reason to put the ax to both 4 and 4S at the same time.
I have enough money to last the rest of my life. Unless I buy something. - Jackie Mason
Never own anything that poops. - RadarTheKat
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I have enough money to last the rest of my life. Unless I buy something. - Jackie Mason
Never own anything that poops. - RadarTheKat
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post #79 of 114

I'm surprised there's so much disagreement here. I just assumed the plan was to drop the 5 and the 4S. They need TD-LTE support (and potentially a few other important hardware related things) across the whole lineup. 

post #80 of 114
Quote:
Originally Posted by jakeb View Post

I just assumed the plan was to drop the 5 and the 4S.

As that's what they've never done, why would it be the plan?

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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