If the manufacturers would actually build vehicles that were different from those sold twenty years ago, people might actually update more often. Instead of worthless features, how about an internal combustion engine that is more than 30% efficient? How about a gigantic push into making battery tech smaller, lighter, and with greater storage? If the car manufacturers would do with their electric motor batteries what Apple did with laptop batteries, we'd have plug-in all-electric cars that could go 600 miles on a charge, get 80% charged in two hours, and even have batteries be light enough for a guy to lift and swap out himself if one went dead away from a plug.
I drive a seventeen year old van that I can still get 25 MPG out of. There's no reason for me to buy a newer vehicle because 1) the darn thing still runs perfectly because I take care of it and 2) even if I did buy a newer vehicle, none of them would give me 25 MPG because no one cares about building fuel efficient vehicles, apparently.
Cars are certainly a mature technology. You are, however, missing out on power steering.
If the manufacturers would actually build vehicles that were different from those sold twenty years ago, people might actually update more often.
And in the phone market pre-iPhone, enough people nevertheless got a new Razr every two years (despite not really having any improvements either). Simply because not getting a new phone would have meant leaving money (the subsidy) on the table.
I think a lot of people here need to think of the mobile market outside of the US. The strange US market is the anomaly. not the rest of the world.
In Europe and elsewhere, the iPhone is not tied to a data contract. Hell, it's not tied to a contract necesarily. I have a SIM only plan that costs me (after various discounts) around £12 a month. For that I get 600 minutes, unlimited SMS and effectively unlimited data. And this is because my carrier is not loaning me any money for a phone. Similarly, I could junk the SIM only plan tomorrow, and put in a PAYG SIM. No problem. No hardware limiting what I can do.
So, to the important bit. Could Apple offer a significantly cheaper phone aimed at the prepay market? Yes, but I think one or two other things would have to happen:
1) Apple do not simply re-hash the 3GS; but design the phone from the ground up to be cheap to assemble. I suspect something like a combination of 3GS res (but 4 quality) 3-3.5" display; an A4 based SoC that includes some of the other capabilities (e.g baseband) on current iPhones (and thus reduce manufacturing costs); reduced or no buttons; and lower memory. You can also include iPod touch quality cameras too.
2) Leverage iCloud. You need less memory if you don't need to carry your music or photo collection with you.
3) Some way of linking top-ups to iTunes. This is a biggie, and would be the most challenging for Apple to accomplish. If top-up balance is held within (or somehow are linked to) iTunes, then Apple have access to a payment mechanism other than credit card. This is important for prepaid where credit card penetration is significantly lower.
Looking at the tear-downs of cheaper iPods, what strikes me is the simplicity of them. Despite being high quality pieces of kit, the components requiring assembly have been pared back to the absolute minimum. Despite the high quality of materials, this (and Apple's volume purchasing) are the reasons Apple can make iPods so cheap.
Whether Apple will or not is difficult to say. I imagine they'd only do it when the market for top-tier iPhones was saturated. Maybe in China first, using Chinese specific radios (and thus not much use selling in the grey market in the rest of the world).
I think a lot of people here need to think of the mobile market outside of the US. The strange US market is the anomaly. not the rest of the world.
In Europe and elsewhere, the iPhone is not tied to a data contract. Hell, it's not tied to a contract necesarily. I have a SIM only plan that costs me (after various discounts) around £12 a month. For that I get 600 minutes, unlimited SMS and effectively unlimited data. And this is because my carrier is not loaning me any money for a phone. Similarly, I could junk the SIM only plan tomorrow, and put in a PAYG SIM. No problem. No hardware limiting what I can do.
So, to the important bit. Could Apple offer a significantly cheaper phone aimed at the prepay market? Yes, but I think one or two other things would have to happen:
1) Apple do not simply re-hash the 3GS; but design the phone from the ground up to be cheap to assemble. I suspect something like a combination of 3GS res (but 4 quality) 3-3.5" display; an A4 based SoC that includes some of the other capabilities (e.g baseband) on current iPhones (and thus reduce manufacturing costs); reduced or no buttons; and lower memory. You can also include iPod touch quality cameras too.
2) Leverage iCloud. You need less memory if you don't need to carry your music or photo collection with you.
3) Some way of linking top-ups to iTunes. This is a biggie, and would be the most challenging for Apple to accomplish. If top-up balance is held within (or somehow are linked to) iTunes, then Apple have access to a payment mechanism other than credit card. This is important for prepaid where credit card penetration is significantly lower.
Looking at the tear-downs of cheaper iPods, what strikes me is the simplicity of them. Despite being high quality pieces of kit, the components requiring assembly have been pared back to the absolute minimum. Despite the high quality of materials, this (and Apple's volume purchasing) are the reasons Apple can make iPods so cheap.
Whether Apple will or not is difficult to say. I imagine they'd only do it when the market for top-tier iPhones was saturated. Maybe in China first, using Chinese specific radios (and thus not much use selling in the grey market in the rest of the world).
Good post. I too see top-ups linked to iTunes, or vice versa as important long term. Doesn't need to be fixed immediately.
Another analysis who has no clue, they are all assuming Apple is going to follow the iPod model with the phones, they may, but it is not a sure bet at this point. Apple could be following another completely different business model for the Phone than what they did on the iPod space.
The middle and low grounds are rip for better product, the problem in that space most all end users have been too condition on getting a free phone verse paying for them.
The question could apple offer a phone with no data services so make it a texting phone with music and apps for kids. My kids have our hand me down iPhones and we unlocked them so they could use them without data plan, they do not like this, but they can not afford to pay for data.
The other things the iPhone has no other product on the market has, the iPhone generate about 10X the cost of the phone in extra revenue for Apple in the way of apps and music and such. The iPhone is becoming the modern day inkjet printer, Epson and HP make so much money from selling ink than they make from selling the printer. That is the same for the iPhone, Apple is leaving very few dollars on the table for others to make.
The problem with the "cheap" iPhone is this: which features get scrapped to differentiate the pre-paid iPhone from the "full-featured" iPhone? What can Apple do to cut costs while maintaining the user experience?
The most expensive components of the iPhone/iPod touch are: touchscreen display and the main silicon: SoC (CPU+GPU+RAM) and NAND flash memory for storage. Using older components (e.g. non-Retina Display panel) and reducing storage (less NAND flash) would accomplish much toward reducing cost.
To further cut costs, other components that could be dumped would be the camera, GPS module, magnetometer (digital compass), and gyroscope.
I'm still skeptical about this rumor though. Proceeding this direction would reduce margins.
how to make the phone for less money so they add a phone just wired to work with pre-pay...
this could be the new sim less phone where you can switch between networks, 3g and 4g, and prepay, that be sweet....
can't see Steve Jobs eating his own words, when he stated smaller screens was not a good idea, so i see the pre-pay iphone being of same size, maybe even look the same on front or whole, they are looking into Liquid Mental Tech,,, TERMINATOR and man, this phone would be for the others.... some say ipod touch with phone capabilities??? like my title "Tricky One" for Apple but a necessity if they want to break the east (main target at the moment)......
Best tactic is to focus on bringing the costs further lower and utilise one design, and let the iso software lock/unlock features between all configurations.... some say introduce the previous gen iPhone for pre-pay? i think it will workout to cost more to run to separate design in production as if you was just to make one, running two wont help in reducing supply demand levels, as we all know about this....
The most expensive components of the iPhone/iPod touch are: touchscreen display and the main silicon: SoC (CPU+GPU+RAM) and NAND flash memory for storage. Using older components (e.g. non-Retina Display panel) and reducing storage (less NAND flash) would accomplish much toward reducing cost.
They are also rumours that the display would be smaller and hence cheaper. There's also another really significant number that we really don't know, which is how much a highly advanced design like the iPhone-4 costs to manufacture. The iSuppli teardown only covered components, but the assembly of something like the iPhone-4 is almost certainly more than the assembly of a Nexus-1 or even an iPhone 3GS.
can't see Steve Jobs eating his own words, when he stated smaller screens was not a good idea,
Jobs has changed directions about these things in the past, and he may well have only meant that small screens were silly for developed western markets. Asian consumers have demonstrably different preferences in some areas, and seem to have a love of super tiny devices.
If this hypothetical phone didn't do apps at all, but instead just did the basic phone functions, plus texts, music and picture taking like any feature phone, it would sell like hotcakes. Give it a tiny little square screen like the iPod nano, hell, maybe it even runs iPod nano games. It doesn't need a keyboard if it has (virtual) T9 like any flip phone, it doesn't need a contract, and it won't suck data.
The average selling price of the iPhone 4 is $650. The iPhone 3GS still goes for $500.
Apple wanted to revolutionize the smartphone industry... not cater to the cheap dumbphone market.
The other things the iPhone has no other product on the market has, the iPhone generate about 10X the cost of the phone in extra revenue for Apple in the way of apps and music and such. The iPhone is becoming the modern day inkjet printer, Epson and HP make so much money from selling ink than they make from selling the printer. That is the same for the iPhone, Apple is leaving very few dollars on the table for others to make.
10 times the cost of the iPhone?
A person would have to buy 2,000 songs to just equal the cost of one iPhone (remember... Apple only keeps 30 cents from each song)
And... the average person only buys roughly 60 apps. That's about $18 if the apps were $1 (again... only 30 cents per app)
Apple is a hardware company... they always have been. Apps and music are only there to help sell the iPhone.
If this hypothetical phone didn't do apps at all, but instead just did the basic phone functions, plus texts, music and picture taking like any feature phone, it would sell like hotcakes. Give it a tiny little square screen like the iPod nano, hell, maybe it even runs iPod nano games. It doesn't need a keyboard if it has (virtual) T9 like any flip phone, it doesn't need a contract, and it won't suck data.
It will be a little piece of Apple magic in your hand and you will be able to buy it in India and Africa and all the other places where the feature phone is still king for next to nothing. It could be the iCloud gateway drug.
Apple is not in the business of selling phones just to sell phones. Their goal is to have their hardware and software tightly coupled with each other, so each will drive the adoption of the other. A feature phone that does not involve itself in Apple's environment will have no place in Apple, because it has little of the Apple magic you talk about.
I can see it not having mobile data, not having a large flash memory capacity, not having a hi-res screen, but processing power will be right up there with last years, or even this year's top model. This baseline phone could very well have similar spec as 3GS does, except with A5 or A6 chip, GSM/CDMA voice only, Wifi data. This should cut about $50-70 off the component price of the top of line model. They could even go with a SD card slot in place of flash memory all together to be even cheaper.
Operational wise, this phone would be little different from iPhone. And the configuration would be cheap enough to allow nearly 50% off the price of top of line model, and still keep close enough profit margine.
iPhone is and will always be a smartphone. This device would still be force to have a data plan. There would be nothing 'mid-range' about this device except for its utter lack of features from the real iPhone. No one would buy it when they have the option of the real iPhone. Case in point, the first-gen iPhone 4 GB. Discontinued in two months because people bought the eight. And a "mid-range, contract-free" iPhone would lack even more.
It's time for all analysts to be jailed.
I have a better one: Predicting what Apple will do based on market analysis is like forecasting the weather based on what you ate last week.
HEY. IDIOTS. (Sorry, talking to the analysts now). You want Apple to release a "mid-range" phone? Hound the carriers to make data plans OPTIONAL. The EXISTING iPhone instantly becomes mid-range, you get millions more subscribers from the people who couldn't care less about/don't need/couldn't afford a data plan, and Apple keeps their massive revenue stream because they're selling even more of the "expensive version" of the iPhone.
They are also rumours that the display would be smaller and hence cheaper.
If Apple went with a smaller display, it would still have to have the same pixel dimensions as the 3GS or 4. In either case, it means the icons, keyboard, game controls and everything get smaller. I don't think the iPhone keyboard would be usable on a smaller screen.
Check for the availability of 2.5" or 3" LED LCD displays are 960x640 or 480x320. Do they even exist? They would have to exist and be in considerable volume for a iPhone mini rumor to hold any water.
I would LOVE to have an iPhone that only made calls and synced contacts and nothing else... for less than half the weight, size and price. I don't need to carry around a computer in my pocket 24/7.
Oh, I'm SURE Apple would LOVE to sell a device that doesn't allow purchases from their App Store or iTunes Store.
You do know you can buy an iPod for under $50 bucks, right?
Few are willing to accept it, but Apple is a mass market player. They don't just want to make Porsches and sell like Porsches. They want to make Porsche quality cars, but sell them like Fords.
No, that analogy doesn't work.
Yes, Apple is a mass market player, however they are still aiming for the premium side of the marketplace, even with their entry level models such as the iPod shuffle. The 2GB shuffle lists at $49 and you can find them discounted down to about $46 whereas you can find a 4GB Coby MP3 player for about $24 street price based on a quick Amazon search.
Apple is not in the business of selling phones just to sell phones. Their goal is to have their hardware and software tightly coupled with each other, so each will drive the adoption of the other. A feature phone that does not involve itself in Apple's environment will have no place in Apple, because it has little of the Apple magic you talk about.
I can see it not having mobile data, not having a large flash memory capacity, not having a hi-res screen, but processing power will be right up there with last years, or even this year's top model. This baseline phone could very well have similar spec as 3GS does, except with A5 or A6 chip, GSM/CDMA voice only, Wifi data. This should cut about $50-70 off the component price of the top of line model. They could even go with a SD card slot in place of flash memory all together to be even cheaper.
Operational wise, this phone would be little different from iPhone. And the configuration would be cheap enough to allow nearly 50% off the price of top of line model, and still keep close enough profit margine.
I'm not sure why you chose me to reply to. Your assumptions are all the exact opposite of mine and more in line with what the analysts and the author of this article believe, yet you not only don't make a compelling case, you don't really say anything new either.
IMO the basic problem here is that everyone is confabulating two essentially different goals into one rumour of one product.
Goal 1) reduce the cost of the iPhone if possible.
Goal 2) make a cheap entry-level phone for those that can't afford iPhone.
These are not the same goal. You are making the same mistake as everyone else in thinking that a reduced cost iPhone would achieve "Goal 2." It can't. Unless Apple is about to also reduce it's margins and throw a ton of profit out the door, merely to achieve market penetration.
Whatever they may or may not do to reduce the overall cost of the iPhone, they can't sell it as a separate product because it destroys the brand and eviscerates sales of the "regular" iPhone. The only way it works is if they stop selling the original iPhone and the new cheap crappy-quality one with the low memory etc. becomes "the iPhone," which is just so unlikely it's not worth talking about.
It's most likely that all the rumours we have been hearing are really about "Goal 1." They are probably doing all they can to keep the cost down and *maybe* we will see a price drop in the near future for the iPhone. "Goal 2" may not even exist.
But if they are pursuing "Goal 2" at all, it can't be just a cheaper version of the iPhone (cheaper parts etc.), it has to be a different phone altogether, closer to a feature phone.
The average selling price of the iPhone 4 is $650. The iPhone 3GS still goes for $500.
Apple wanted to revolutionize the smartphone industry... not cater to the cheap dumbphone market.
I've seen nothing that would suggest Apple is *only* interested in the smartphone portion of the market, nor have they said so themselves. They may be, they may not be.
We will likely find out when they produce their first feature phone.
I fail to see what the difference between an iPod touch with 3G and an unlocked iPhone is. Unless you mean an unlocked iPhone with the slightly cheaper body and display of the current iPod touch.
Comments
If the manufacturers would actually build vehicles that were different from those sold twenty years ago, people might actually update more often. Instead of worthless features, how about an internal combustion engine that is more than 30% efficient? How about a gigantic push into making battery tech smaller, lighter, and with greater storage? If the car manufacturers would do with their electric motor batteries what Apple did with laptop batteries, we'd have plug-in all-electric cars that could go 600 miles on a charge, get 80% charged in two hours, and even have batteries be light enough for a guy to lift and swap out himself if one went dead away from a plug.
I drive a seventeen year old van that I can still get 25 MPG out of. There's no reason for me to buy a newer vehicle because 1) the darn thing still runs perfectly because I take care of it and 2) even if I did buy a newer vehicle, none of them would give me 25 MPG because no one cares about building fuel efficient vehicles, apparently.
Cars are certainly a mature technology. You are, however, missing out on power steering.
If the manufacturers would actually build vehicles that were different from those sold twenty years ago, people might actually update more often.
And in the phone market pre-iPhone, enough people nevertheless got a new Razr every two years (despite not really having any improvements either). Simply because not getting a new phone would have meant leaving money (the subsidy) on the table.
In Europe and elsewhere, the iPhone is not tied to a data contract. Hell, it's not tied to a contract necesarily. I have a SIM only plan that costs me (after various discounts) around £12 a month. For that I get 600 minutes, unlimited SMS and effectively unlimited data. And this is because my carrier is not loaning me any money for a phone. Similarly, I could junk the SIM only plan tomorrow, and put in a PAYG SIM. No problem. No hardware limiting what I can do.
So, to the important bit. Could Apple offer a significantly cheaper phone aimed at the prepay market? Yes, but I think one or two other things would have to happen:
1) Apple do not simply re-hash the 3GS; but design the phone from the ground up to be cheap to assemble. I suspect something like a combination of 3GS res (but 4 quality) 3-3.5" display; an A4 based SoC that includes some of the other capabilities (e.g baseband) on current iPhones (and thus reduce manufacturing costs); reduced or no buttons; and lower memory. You can also include iPod touch quality cameras too.
2) Leverage iCloud. You need less memory if you don't need to carry your music or photo collection with you.
3) Some way of linking top-ups to iTunes. This is a biggie, and would be the most challenging for Apple to accomplish. If top-up balance is held within (or somehow are linked to) iTunes, then Apple have access to a payment mechanism other than credit card. This is important for prepaid where credit card penetration is significantly lower.
Looking at the tear-downs of cheaper iPods, what strikes me is the simplicity of them. Despite being high quality pieces of kit, the components requiring assembly have been pared back to the absolute minimum. Despite the high quality of materials, this (and Apple's volume purchasing) are the reasons Apple can make iPods so cheap.
Whether Apple will or not is difficult to say. I imagine they'd only do it when the market for top-tier iPhones was saturated. Maybe in China first, using Chinese specific radios (and thus not much use selling in the grey market in the rest of the world).
I think a lot of people here need to think of the mobile market outside of the US. The strange US market is the anomaly. not the rest of the world.
In Europe and elsewhere, the iPhone is not tied to a data contract. Hell, it's not tied to a contract necesarily. I have a SIM only plan that costs me (after various discounts) around £12 a month. For that I get 600 minutes, unlimited SMS and effectively unlimited data. And this is because my carrier is not loaning me any money for a phone. Similarly, I could junk the SIM only plan tomorrow, and put in a PAYG SIM. No problem. No hardware limiting what I can do.
So, to the important bit. Could Apple offer a significantly cheaper phone aimed at the prepay market? Yes, but I think one or two other things would have to happen:
1) Apple do not simply re-hash the 3GS; but design the phone from the ground up to be cheap to assemble. I suspect something like a combination of 3GS res (but 4 quality) 3-3.5" display; an A4 based SoC that includes some of the other capabilities (e.g baseband) on current iPhones (and thus reduce manufacturing costs); reduced or no buttons; and lower memory. You can also include iPod touch quality cameras too.
2) Leverage iCloud. You need less memory if you don't need to carry your music or photo collection with you.
3) Some way of linking top-ups to iTunes. This is a biggie, and would be the most challenging for Apple to accomplish. If top-up balance is held within (or somehow are linked to) iTunes, then Apple have access to a payment mechanism other than credit card. This is important for prepaid where credit card penetration is significantly lower.
Looking at the tear-downs of cheaper iPods, what strikes me is the simplicity of them. Despite being high quality pieces of kit, the components requiring assembly have been pared back to the absolute minimum. Despite the high quality of materials, this (and Apple's volume purchasing) are the reasons Apple can make iPods so cheap.
Whether Apple will or not is difficult to say. I imagine they'd only do it when the market for top-tier iPhones was saturated. Maybe in China first, using Chinese specific radios (and thus not much use selling in the grey market in the rest of the world).
Good post. I too see top-ups linked to iTunes, or vice versa as important long term. Doesn't need to be fixed immediately.
The middle and low grounds are rip for better product, the problem in that space most all end users have been too condition on getting a free phone verse paying for them.
The question could apple offer a phone with no data services so make it a texting phone with music and apps for kids. My kids have our hand me down iPhones and we unlocked them so they could use them without data plan, they do not like this, but they can not afford to pay for data.
The other things the iPhone has no other product on the market has, the iPhone generate about 10X the cost of the phone in extra revenue for Apple in the way of apps and music and such. The iPhone is becoming the modern day inkjet printer, Epson and HP make so much money from selling ink than they make from selling the printer. That is the same for the iPhone, Apple is leaving very few dollars on the table for others to make.
The problem with the "cheap" iPhone is this: which features get scrapped to differentiate the pre-paid iPhone from the "full-featured" iPhone? What can Apple do to cut costs while maintaining the user experience?
The most expensive components of the iPhone/iPod touch are: touchscreen display and the main silicon: SoC (CPU+GPU+RAM) and NAND flash memory for storage. Using older components (e.g. non-Retina Display panel) and reducing storage (less NAND flash) would accomplish much toward reducing cost.
To further cut costs, other components that could be dumped would be the camera, GPS module, magnetometer (digital compass), and gyroscope.
I'm still skeptical about this rumor though. Proceeding this direction would reduce margins.
how to make the phone for less money so they add a phone just wired to work with pre-pay...
this could be the new sim less phone where you can switch between networks, 3g and 4g, and prepay, that be sweet....
can't see Steve Jobs eating his own words, when he stated smaller screens was not a good idea, so i see the pre-pay iphone being of same size, maybe even look the same on front or whole, they are looking into Liquid Mental Tech,,, TERMINATOR and man, this phone would be for the others.... some say ipod touch with phone capabilities??? like my title "Tricky One" for Apple but a necessity if they want to break the east (main target at the moment)......
Best tactic is to focus on bringing the costs further lower and utilise one design, and let the iso software lock/unlock features between all configurations.... some say introduce the previous gen iPhone for pre-pay? i think it will workout to cost more to run to separate design in production as if you was just to make one, running two wont help in reducing supply demand levels, as we all know about this....
ANY IDEAS ANYONE?
The most expensive components of the iPhone/iPod touch are: touchscreen display and the main silicon: SoC (CPU+GPU+RAM) and NAND flash memory for storage. Using older components (e.g. non-Retina Display panel) and reducing storage (less NAND flash) would accomplish much toward reducing cost.
They are also rumours that the display would be smaller and hence cheaper. There's also another really significant number that we really don't know, which is how much a highly advanced design like the iPhone-4 costs to manufacture. The iSuppli teardown only covered components, but the assembly of something like the iPhone-4 is almost certainly more than the assembly of a Nexus-1 or even an iPhone 3GS.
can't see Steve Jobs eating his own words, when he stated smaller screens was not a good idea,
Jobs has changed directions about these things in the past, and he may well have only meant that small screens were silly for developed western markets. Asian consumers have demonstrably different preferences in some areas, and seem to have a love of super tiny devices.
If this hypothetical phone didn't do apps at all, but instead just did the basic phone functions, plus texts, music and picture taking like any feature phone, it would sell like hotcakes. Give it a tiny little square screen like the iPod nano, hell, maybe it even runs iPod nano games. It doesn't need a keyboard if it has (virtual) T9 like any flip phone, it doesn't need a contract, and it won't suck data.
The average selling price of the iPhone 4 is $650. The iPhone 3GS still goes for $500.
Apple wanted to revolutionize the smartphone industry... not cater to the cheap dumbphone market.
The other things the iPhone has no other product on the market has, the iPhone generate about 10X the cost of the phone in extra revenue for Apple in the way of apps and music and such. The iPhone is becoming the modern day inkjet printer, Epson and HP make so much money from selling ink than they make from selling the printer. That is the same for the iPhone, Apple is leaving very few dollars on the table for others to make.
10 times the cost of the iPhone?
A person would have to buy 2,000 songs to just equal the cost of one iPhone (remember... Apple only keeps 30 cents from each song)
And... the average person only buys roughly 60 apps. That's about $18 if the apps were $1 (again... only 30 cents per app)
Apple is a hardware company... they always have been. Apps and music are only there to help sell the iPhone.
The iPhone itself is still the big thing.
If this hypothetical phone didn't do apps at all, but instead just did the basic phone functions, plus texts, music and picture taking like any feature phone, it would sell like hotcakes. Give it a tiny little square screen like the iPod nano, hell, maybe it even runs iPod nano games. It doesn't need a keyboard if it has (virtual) T9 like any flip phone, it doesn't need a contract, and it won't suck data.
It will be a little piece of Apple magic in your hand and you will be able to buy it in India and Africa and all the other places where the feature phone is still king for next to nothing. It could be the iCloud gateway drug.
Apple is not in the business of selling phones just to sell phones. Their goal is to have their hardware and software tightly coupled with each other, so each will drive the adoption of the other. A feature phone that does not involve itself in Apple's environment will have no place in Apple, because it has little of the Apple magic you talk about.
I can see it not having mobile data, not having a large flash memory capacity, not having a hi-res screen, but processing power will be right up there with last years, or even this year's top model. This baseline phone could very well have similar spec as 3GS does, except with A5 or A6 chip, GSM/CDMA voice only, Wifi data. This should cut about $50-70 off the component price of the top of line model. They could even go with a SD card slot in place of flash memory all together to be even cheaper.
Operational wise, this phone would be little different from iPhone. And the configuration would be cheap enough to allow nearly 50% off the price of top of line model, and still keep close enough profit margine.
iPhone is and will always be a smartphone. This device would still be force to have a data plan. There would be nothing 'mid-range' about this device except for its utter lack of features from the real iPhone. No one would buy it when they have the option of the real iPhone. Case in point, the first-gen iPhone 4 GB. Discontinued in two months because people bought the eight. And a "mid-range, contract-free" iPhone would lack even more.
It's time for all analysts to be jailed.
I have a better one: Predicting what Apple will do based on market analysis is like forecasting the weather based on what you ate last week.
HEY. IDIOTS. (Sorry, talking to the analysts now). You want Apple to release a "mid-range" phone? Hound the carriers to make data plans OPTIONAL. The EXISTING iPhone instantly becomes mid-range, you get millions more subscribers from the people who couldn't care less about/don't need/couldn't afford a data plan, and Apple keeps their massive revenue stream because they're selling even more of the "expensive version" of the iPhone.
nano phone
9
iPhone 5 = Latest Spec + 4G/LTE + 4" screen > Target = Contract Market
iPhone 4s = Lower Spec + 3G + 4" screen > Target = Pre-Paid Market
iPod Touch = Same spec as iPhone 4s without the phone + 4" screen
Use same iOS Apps on all 3 = simplicity for app developers.
They might differentiate 5 & 4s with new names (iPhone Air / iPhone Classic) & different designs
They are also rumours that the display would be smaller and hence cheaper.
If Apple went with a smaller display, it would still have to have the same pixel dimensions as the 3GS or 4. In either case, it means the icons, keyboard, game controls and everything get smaller. I don't think the iPhone keyboard would be usable on a smaller screen.
Check for the availability of 2.5" or 3" LED LCD displays are 960x640 or 480x320. Do they even exist? They would have to exist and be in considerable volume for a iPhone mini rumor to hold any water.
I would LOVE to have an iPhone that only made calls and synced contacts and nothing else... for less than half the weight, size and price. I don't need to carry around a computer in my pocket 24/7.
Oh, I'm SURE Apple would LOVE to sell a device that doesn't allow purchases from their App Store or iTunes Store.
You do know you can buy an iPod for under $50 bucks, right?
Few are willing to accept it, but Apple is a mass market player. They don't just want to make Porsches and sell like Porsches. They want to make Porsche quality cars, but sell them like Fords.
No, that analogy doesn't work.
Yes, Apple is a mass market player, however they are still aiming for the premium side of the marketplace, even with their entry level models such as the iPod shuffle. The 2GB shuffle lists at $49 and you can find them discounted down to about $46 whereas you can find a 4GB Coby MP3 player for about $24 street price based on a quick Amazon search.
Apple is not in the business of selling phones just to sell phones. Their goal is to have their hardware and software tightly coupled with each other, so each will drive the adoption of the other. A feature phone that does not involve itself in Apple's environment will have no place in Apple, because it has little of the Apple magic you talk about.
I can see it not having mobile data, not having a large flash memory capacity, not having a hi-res screen, but processing power will be right up there with last years, or even this year's top model. This baseline phone could very well have similar spec as 3GS does, except with A5 or A6 chip, GSM/CDMA voice only, Wifi data. This should cut about $50-70 off the component price of the top of line model. They could even go with a SD card slot in place of flash memory all together to be even cheaper.
Operational wise, this phone would be little different from iPhone. And the configuration would be cheap enough to allow nearly 50% off the price of top of line model, and still keep close enough profit margine.
I'm not sure why you chose me to reply to. Your assumptions are all the exact opposite of mine and more in line with what the analysts and the author of this article believe, yet you not only don't make a compelling case, you don't really say anything new either.
IMO the basic problem here is that everyone is confabulating two essentially different goals into one rumour of one product.
Goal 1) reduce the cost of the iPhone if possible.
Goal 2) make a cheap entry-level phone for those that can't afford iPhone.
These are not the same goal. You are making the same mistake as everyone else in thinking that a reduced cost iPhone would achieve "Goal 2." It can't. Unless Apple is about to also reduce it's margins and throw a ton of profit out the door, merely to achieve market penetration.
Whatever they may or may not do to reduce the overall cost of the iPhone, they can't sell it as a separate product because it destroys the brand and eviscerates sales of the "regular" iPhone. The only way it works is if they stop selling the original iPhone and the new cheap crappy-quality one with the low memory etc. becomes "the iPhone," which is just so unlikely it's not worth talking about.
It's most likely that all the rumours we have been hearing are really about "Goal 1." They are probably doing all they can to keep the cost down and *maybe* we will see a price drop in the near future for the iPhone. "Goal 2" may not even exist.
But if they are pursuing "Goal 2" at all, it can't be just a cheaper version of the iPhone (cheaper parts etc.), it has to be a different phone altogether, closer to a feature phone.
The average selling price of the iPhone 4 is $650. The iPhone 3GS still goes for $500.
Apple wanted to revolutionize the smartphone industry... not cater to the cheap dumbphone market.
I've seen nothing that would suggest Apple is *only* interested in the smartphone portion of the market, nor have they said so themselves. They may be, they may not be.
We will likely find out when they produce their first feature phone.
I fail to see what the difference between an iPod touch with 3G and an unlocked iPhone is. Unless you mean an unlocked iPhone with the slightly cheaper body and display of the current iPod touch.
3G as in data-only, like the iPad.