“Is Apple going to sell the iPhone 4 at $99 and the ‘iPhone 4S’ at $199 alongside it? Nearly identical phones in terms of physical appearance? Someone walking into a store is going to have to choose between the iPhone with the faster processor and better camera and one with a slower processor and a still-great camera? Hardly,” Jonathan S. Geller writes for BGR. “If there even is an actual iPhone 4S — one that’s sole purpose hasn’t been just for high-profile iOS developers to use a test sled for Apple’s new hardware that’s coming in the iPhone 5 — my bet is that it will replace the iPhone 4, but the iPhone 4S will still be the entry-level iPhone.”
Geller writes, “Apple can afford to take a, what, 15%-ish margin hit to deliver a better iPhone for a better price of $99 on contract… It won’t only damage the competition, it will crush, destroy, and eliminate them… Then there’s the iPhone 5 that everyone is waiting (and hoping) for at $199/$299, which will be another leap above anything the competition can offer.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]
Hmm! So it’s confirmed to be released next month? Or is this just a rumor?
It is a confirmed rumor
LOL.
YOu must work on Wall Street.
Gotta lover how all these analysts think Apple can “take a hit” with its margins just to grab market share.
They simply don’t get it. When you start reducing prices just to be less expensive than the competition at the cost of your profits, you get into a price war from which you can never recover. You can’t lower prices, win market share, then raise prices again.
Apple will just continue to beat its competition as it has been doing, by producing a significantly better product that people love to use at a fair price.
You’re not getting it. What you say is exactly right, but Apple wouldn’t be reducing their margins.
The iPhone 4 is a year old, they’ve already reduced costs and greatly boosted their margins on that model. Moores law effectively means that prices should drop by %50 every 18 months, and Apple has probably been able to cut costs on the iPhone 4 by %33 over the last 12 months.
So, if they drop its price by $100 or so, they will likely still be making more on it now than they did when they introduced it.
Its the iPhone 5 that will have the smaller margins…. to start with, anyway.
You are miss using Moore’s Law here. It only means number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. (So, ever 2 years cost drops by 50% on the chips.)
So yes, Apple chip cost have gone down. It is really the production costs that improved. The major chips were originally only estimated by iSuppli to be about $60 of the total cost.
Also, the reoccurring production cost are key to the improvement.
You are misusing the word “miss using,” my friend.
Apple is reducing price on only one low end phone while having another better phone that maintain a higher margin. That’s not reducing price! That’s addressing a new market!
The 99 iPhone are for people who don’t want to pay a high price for an iPhone. Those who can and want a iPhone 5 will still get an iPhone 5.
Based on apple’s customer behavior and price sensitivity, the cannabliztion of iPhone 5 by a $99 iPhone will be limited. Therefore, profit and revenue of high end iPhone will still continue to grow. BUT apple will get more revenue and more profit in absolute terms by addressing the low end market.
It’s the same strategy that Porsche introduced Boxter years ago. People didn’t stop buying 911 and Porsche is still able to capturenew customers, namely those who can’t afford 911.
Additionally, since the 2 iPhones will share virtually the same components except the chip and camera, it means Cook has a even more massive bargaining power over suppliers due to economy of scale.
I think you’re missing Bizlaw’s point entirely. Margins are irrelevant; it’s the perception of how price relates to value. Introducing a new phone with a $99 price point marks the path down a slope that Apple doesn’t want – or need – to go down.
If there is a second, cheaper phone, it will be the iPhone 4.
“Is Apple going to sell the iPhone 4 at $99 and the ‘iPhone 4S’ at $199 alongside it? Nearly identical phones in terms of physical appearance? Someone walking into a store is going to have to choose between the iPhone with the faster processor and better camera and one with a slower processor and a still-great camera? Hardly,”
Can we say 3G and 3GS?
back then there was nothing like the iPhone… now there is plenty of good phones, maybe not as good but good nonetheless. i don’t see how anyone would pay 299 for a phone that looks just like the 99 dollar phone. i really hope apple goes beyond an iPhone 4s after 18 months.
There is also plenty of people with bad grammar out there.
Agreed a100%.
No kidding! What an ignorant dolt this “tech” author is!
Would Apple sell a 4S alongside a 4?
Yes! They’ve done it before, selling the 3G alongside the 3GS. For the extra $100 my wife got a better camera, a faster phone, and double the storage (32gb).
Frankly I don’t care what they release just as long as they release it in the next couple weeks.
Apple doesn’t do “a, what, 15%-ish margin hit.”
A $99 iPhone with a $400 subsidy that the customer pays back over two years is still an expensive phone. The total cost of ownership is not much less than a $199 iPhone with a $400 subsidy. That approach will work fine, because it has already been working fine, but it’s not some type of revolutionary change that will “crush, destroy, and eliminate” the competition (at least not any more than iPhone has been doing already).
These “analysts” need to think different. What part of the mobile phone market has iPhone not penetrated, and also has far more unit sales per year than all the iPhones ever sold since 2007? To be a truly revolutionary approach that will “crush, destroy, and eliminate,” Apple needs to go after that market with a NEW phone that does NOT cannibalize sales from the immensely popular and profitable fully-subsidized iPhone.
Yep. The difference in total cost to the consumer between an iPhone 3GS and an iPhone 4 over the contract period works out to $150, about one BigMac Meal per month. This ignores the selling price of the used iPhones at the end of the contract, part of TCO, but the net picture remains similar, except maybe only a Happy Meal per month.
It seems to me that with iCloud the iPhone4S could be a model with only 4GB of memory priced at $99, free with fatter data plans.
I just hope that Apple brings more to the table than a better camera and faster processor (and iOS 5 obviously). Too much time has gone by since the last update to just leave it to that. I just fear that they are going to hang their hat on better software and the app store. They are going to catch enough flack for not having 4G (despite the hardware and coverage not developed enough yet). I am hoping that they increase the screen size and update the form factor to what has been circulating around. Show off the software on a larger screen, improve the antenna, and improve the battery life. Not knocking Apple, just hoping to see more than a camera and a speed bump.
I need it now, too. Until I get one, it’s all just rumors.
I feel certain, almost, that the big change will come next year, sometime, with the A6 processor and 4G/LTE radio. This will finally allow the iPhone to access AT&T and V’s LTE networks, and for AT&T’s HSPA as a fallback in non-LTE markets. Even though HSPA is a 3G radio, the current iPhone 3G cannot access it.
Mr.Cook could surprise us with an 4G/LTE phone, but don’t hold your breath. But then again, all these statements about the phones announced could be a cover to fool the public. Now I would have fewer qualms about Tim Cook being a “cool” leader for Apple. October 4 is not too far off.
People will be disappointed if there’s no iPhone 5. Apple will sell the iPhone 5 starting at $199 and an entry phone (iPhone 4S?) at $99. It’s that simple.
Dis-information. It’s all bullshit. It’s going to be a completely new model, iPhone 5, and they’ll continue to sell the iPhone 4 unchanged for cheaper. The iPhone 4 will take the place of the iPhone 3GS.
yup. when the hardware changes noticeably, Apple ups the model number by a digit. and it likes to keep it in step with the OS number for consistency if possible. both result in “iPhone 5” being the name.
the new iPhone will at least have spec bumps for the processor and camera. and it’s pretty well established the screen will be a bit bigger, so it will look different. if it adds NFC and/or LTE, that all adds up to a noticeably different model.
and i bet the prices stay exactly the same as now, with the iPhone 4 replacing the 3GS for $100 less. why cut prices when Apple can sell every iPhone it can make without doing that?
Still think that the iPhone launch moving to the iPod launch window shows Apple intend on merging the product categories. Think previous reports of iPod phones (cheap iPhones) makes sense to combat the BB 8520/9300 crew combined with imessenger & price £199 would kill Blackberry! These would be unlocked with just insert a sim (payasyougo) style approach. Hence why we’ve heard no news on iPod updates from Apple.
Prepare to be disappointed October 5
Here’s what I would hope for –
iphone 3gs discontinued
iphone 4 $49
iphone 4s $99
Iphone 5 $199/299
I think Apple would make a mistake if they didn’t release a iphone 5.
It seems to me that the 4s should be the less expensive model with a less expensive camera and A4 processor. The iPhone 5 is due and will have a beter camera, A5 processor and …?
Not that they know more than any of us but a Verizon person I spoke to says that the iPhone 5 will not be out until next year and will need to have LTE. He said if the iPhone 5 does not have LTE it will be a black eye on Apple and other phones will gain ground. So the theories that the new phone to be introduced will be a iPhone 4s as a less expensive phone would make sense.
offtopic
Is the second time you put one poll about Gore leaving his position at Apple. You don’t explain why…Suspicious
I will not speak about your competence, the write-up merely disgusting