Philip Elmer-DeWitt reports for Fortune, “Peter Burrows, a tech writer who knows his stuff, reports in Bloomberg Businessweek that Apple is putting the finishing touches on two key technologies: An iPhone one-third smaller than today’s model that could be sold for about $200 without a contract; New software built around a dual-mode chipset and a universal SIM that would allow users to change carriers on the fly.”
“Why is this a big deal?,” P.E.D. asks. “Because as long as customers buy subsidized cellphones on the cheap — say a $49 iPhone 3GS from AT&T on a 2-year contract — they are slaves to their carrier for the life of that contract (or until they pay an early termination fee).”
P.E.D. writes, “If the carriers won’t sell a carrier-independent iPhone, Apple has a few hundred heavily-trafficked stores that will. Moreover, there are huge overseas markets — India being the biggest — where most users buy unsubsidized phones and pay for their minutes as they use them. ‘Instead of targeting 25 percent of the global mobile-phone market,’ Needham’s Charlie Wolf told Bloomberg Businessweek, ‘Apple would be going after 100 percent.'”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]
Related article:
RUMOR: Apple working on smaller, contract-free iPhone model – February 10, 2011
Why a tiny Apple iPhone is just a figment of John Gruber’s imagination.
He admits it’s just something he thought of with absolutely no inside information.
Grubers comment was in regards to the iPad mini. As far as i know it was an “un-confirmed source” who came up with the iPhone mini rumor.
Gruber’s admitting he had no source for the iPad comment:
“Now when I make actual guesses, some people (not unreasonably) think I’m being coy and actually releasing information that I know. Henceforth, when I say I’m guessing, I’m really guessing. That includes what I’m about to guess about the iPad hardware release schedule.)”
http://daringfireball.net/2011/02/the_next_six_months
end italic
Another try to end italic.
If he means 1/3 THINNER, I get that. SMALLER, no.
I’m not a big fan of cross-posting, but I’ll make an exception here, because it is pertinent. I posted this in the other thread:
The main question here is, how many people are out there carrying a small dumbphone and a regular (non-touch) iPod. These would be the prime candidates.
Keep in mind, a cheaper iPhone is not just a cheaper phone; it is a cheaper plan. There are quite many people who simply can’t afford (or justify) $80 per month (almost a $1,000 per year — two iPads!) for a mobile phone plan. In fact, there is an enormous market out there in the world for pre-paid (i.e. full price, no plan) phones, where an iPod with a phone (which doesn’t demand a data plan) would thoroughly trounce all those Nokias.
If an iPod nano (previous generation, with click wheel) cost $150, the same device with a phone and some slick user interface changes could go perhaps for $220 and still hold onto the healthy profit margins Apple requires before even considering making/selling the device.
Let’s not forget, all these devices plug into the entrenched iTunes ecosystem.
sounds good to me. i don’t own an iphone cause i prefer prepaid phones.
100% of the market is great. If like the mp3 market they only get 75% or more, that is great. Just push the scraps to the floor for the other iKillers.
This would make a great FREE iPod with your students new Mac this summer!
“Why a tiny Apple iPhone is just a figment of John Gruber’s imagination.”
Gruber? Where did you get him? The article is written by P.E.D. (Phillip Elmer Dewitt), quotes Peter Burrows, as well as MG Siegler. Gruber isn’t mentioned anywhere.
A cheap phone (NOT iPhone) from Apple that can benefit from the iTunes ecosystem will tap the low end of the market will increase the iTunes community population.
There has to be clear differences to ensure it targets those who have a phone budget only and not entice away potential iPhone with an expensive plan away.
This could be a huge issue for people who travel overseas regularly. Instead of paying extortionate data roaming charges, you can register as a pay as you go customer with a local telecoms provider. This would be particularly true for Internet rather than voice calls as you don’t have a fixed number for internet access and can access your account from multiple places. For voice, people need to call you on a known number.
If this catches on, established cellphone providers will have to reduce data roaming prices in order to retain those customers.
In the UK, there are already companies that offer low rates, either PAYG or monthly deals ( no ongoing contract obligation ) to customers who provide their own phone. I see a bright future for this style of operation.
We’ve had a couple of decades of rapid evolution in mobile phones. In recent years, we have become accustomed to signing up to a contract and changing our phone every year or so, whether we needed to or not and then finance that new phone through higher monthly charges throughout the year.
I’d much rather buy a phone that I like, pay less each month and keep that phone for a few years.
Nothing prevents Apple from doing that, and they have in fact been doing it in some markets. However, since the iPhone normally retails for north of $500 (and in some countries, up to an equivalent of $1,000 US), such an idea is quite unattractive to consumers.
The question is whether this roumored phone is a smart- or a dumbphone (i.e. whether it focuses on smartphone features or not). I have a cheap (free with plan) Sony Ericsson that has G-mail and Google Maps (downloaded from Google), an Opera web browser, Walkman media player, a camera (that shoots video), plus many other “smartphone”-like features, but it is essentially a dumbphone, as it doesn’t require data plan and it doesn’t really encourage you to use any of those features. If this mini-iPhone ends up like that, it has the potential to kill the dumbphone market. If it ends up being a cheaper iPhone (with emphasis on apps and data), the appeal will likely be more limited and cannibalisation may occur.
£600 unsubsidised iPhones direct from Apple seem to be selling well enough in the UK. We bought two and can run them on a far cheaper plan that the subsidised 3Gs we had before. Also, swapping the SIM card when travelling between countries saves a bundle on roaming charges from a single provider
apple going for the jugular, I like it! so this is that cheaper world phone we were hearing so many rumors about last year. it makes sense.. like a smaller version of the 3GS without the retina display, along with an improved UI that moves things out of the way that aren’t necessary. I think it will be great for cash strapped people, third world nations, and girls who don’t care much about the apps or performance but still want a great (slim) phone. I have a feeling it will be ‘delayed’ at least a couple months from the iPhone 5 launch though 😉
@ chris f
“third world nations and girls who don’t care much about app or performance” How about just millions of ‘guys’ and first world nations who just needs a phone that combines an Ipod? Not everyone has a compelling reason to have apps on their phone.
Apple made the smartphones of 2007 look dumb. Now will they make the dumbphones of 2011 look completely worthless?
And count me as one of those people carrying around a dumbphone and my beloved iPod touch. I am very used to wifi only data readily available to me at my 3 favorite hangouts: home, work and Starbucks. I would gladly do without a data plan if I could replace the 2 devices in my front pockets with one new model iPhone minus data plan through Verizon. But I don’t won’t them to skimp on the size. There, magically make that happen!
The iMini combined with an iPod Touch will rock. Go out, iPod playing in the car. Get where you’re going and slip the little Mini in your shirt pocket. Good to go.
iPod to go online (wi-fi) cheaper phone plan, conquer the world.
Everybody has an old iPhone….why not just dump the data plane so it becomes a iTouch that makes calls and give it to the kids.
Hey, when did the comments font change?. 10:00 am?.
I’m guessing someone turned italics on in their post and didn’t close them
Sorry but I disagree.
“‘Instead of targeting 25 percent of the global mobile-phone market,’ Needham’s Charlie Wolf told Bloomberg Businessweek, ‘Apple would be going after 100 percent.”
Chasing the scraps is a waste of Apple’s money.
While I like the idea of a cheaper plan, Many carriers just do not have that available with data. Cheap plan, cheap phone. And as far as buying the phone direct….. er…… why? If you still have to pay for the plan with NO savings, then getting the phone cheap is free money.
Just a thought,
en
I *guess* I could believe they’re making a smaller phone, but I sort of doubt it. If they do, it would have to be the same screen res as the retina display (too expensive) or the old 3Gs phones (cheap, for sure). Reason being you’d want all iOS apps to run on that phone.
What I could believe is something like an iPhone with the screen resolution of the 3G, and 4GB of memory. What I don’t believe is Apple building a new device that requires a significant deviation to iOS.
if this happens n they price it at 200 bucks….. then it ll b a clear winner in india!!
Doesn’t make much sense to me. Low-end part of the market? Since when Apple tries to reach that audience?
I don’t have a great use for a mobile but I would like an iPhone on PAYG. Seems an ideal product for me.
I’ve been researching this all day and I don’t believe this will be called an iPhone, I think there will be a new product family to help widen the market, http://tinyurl.com/6lekpzg
A little iPod Nano that makes phone calls? I would buy one.
I am not convinced of the logic of all of this supposition. If you are talking about a *truly* miniature phone that you could wear, then I can see the potential. As I posted quite a while back, add cell phone functionality to the new iPod nano along with a tiny camera for FaceTime, and slap on a wristband. Bingo, the Dick Tracy video phone watch from 60 years ago.
But what are you going to take out of the current iPhone that will make it significantly cheaper (1/2 the price or less) and, yet, doesn’t cripple it? How can you combine an iPod with a cell phone and leave out a bunch of components that are currently in the iPhone?
Trim the size? That might actually increase the price because Apple would have to pack essentially the same set of components in a smaller package, more than offsetting the potential cost savings from a smaller display. The iPhone 4 is already almost a solid block of material. Besides, the real cost is in the monthly plan. If you could simply sever the data plan from the cell phone minutes, then the total cost of ownership of the current iPhone 4 would drop by hundreds of dollars per year.
If Apple can significantly reduce the cost of the iPhone hardware, then great. Everyone wins. But it is the recurring monthly cost of the data plan that prices me and many others out of the iPhone market. Roughly $1000 per year is just too much to justify on top of home internet access, satellite TV, etc.
I don’t see it happening. There’s no reason – a big part of the iPhone’s allure is apps and the multi-touch. Lose those functions, and you just have another phone.
Could this be a clue? http://tinyurl.com/yd75sr2