“Apple rumors are inescapable and never-ending, but they’ve really heated up in recent weeks with reports of a new mini iPhone (similar in size and appearance to the iPod Nano) bubbling around the Web,” Faith Merino reports for Vator.tv. “The smaller, less capable, but undoubtedly WAY cuter iPhone is said to be about half the size of the regular iPhone and will be significantly more affordable. Currently, Apple sells iPhones to carriers for $625 each, which carriers make back over time by selling individual units for $199 each plus a two-year contract.”
Merino reports, “The new mini iPhone will be sold alongside Apple’s existing line of iPhones and will surely help secure a stronger grip on the market as competition from Android heats up. A report released Tuesday morning from Bernstein Research predicts that a lower priced iPhone will expand Apple’s addressable market six-fold while more than doubling revenue.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Dow C.” for the heads up.]
Those guys over at Nokia gotta be hating life. First their upper end aspirations crater from some fruit company out’a nowhere, and now the rumors of a candybar cruncher gaining speed even before they can get raped by MSFT.
I will believe it when I see it… I don’t see the big gain. Is Apple chasing number of units sold like points on a scoreboard ? Smaller iPods were OK. Smaller, less able iPhones might be too drastic a move
I think most people are thinking about this the wrong way. It’s not a “mini iPhone.” It’s an iPod nano with basic mobile phone features. So…
Will it have a camera? – Yes. Will it take video? – No. Will it do text messaging? – Yes. Will it do FaceTime? – No. No WiFi. No Bluetooth. No accelerometer. No gyros. No Retina Display. No A4 processor. And no third-party apps, just built-in features.
Apple is probably making at least $400 profit (on average) per iPhone, if not more. Apple is not going to reduce sales of the subsidized iPhone by introducing a “cheap iPhone” that sells for less than half the PROFIT made on the existing iPhone. That would be stupid.
Instead, this new not-an-iPhone, needs to address a market segment currently NOT penetrated by Apple, without stealing customers from the subsidized iPhone. The only way to do so is to create an “iPhone” that is obviously NOT an iPhone (even if it is called “iPhone something”)… Like an iPod shuffle is obviously NOT a “full” iPod.
Last year, I wondered why Apple designed the new iPod nano with a slick multi-touch interface that felt like iOS without being iOS. It seemed pretty elaborate for use on just one iPod model. Now I think I get it. I think that pseudo-iOS used by iPod nano is “Version 1.0” of the OS for this “iPhone nano” (assuming it actually exists).
I totally agree. I would carry this ( in a wrist strap) along with my verizon iPhone 5.
YES!!! bring on the iPhone shuffle with ALL the bells and whistles.
😉
I think you have the essential point. Why would Apple go down a path that causes them to produce six times as many units to merely double revenue? And the profit per unit sold would be how low? Doesn’t seem like Apples path, somehow. They skim the top of the profitability chain with premium products, sold at a premium price. Apple makes more profit from computer sales than anybody, while selling fewer units and doesn’t worry about how many units other manufacturers sell. Why would they change?
The answer to me is simple: Apple goes after this market to get people into the Apple ecosystem. Since it should play iTunes music (again, if this device exists), they get another iPod out there that happens to be a phone. If that person needs a new phone in the future, and they have enjoyed their experience with the iPhone nano (or mini, or whatever), then that person is more likely to buy a regular iPhone, or forgo the iPhone and get an iPad… It would be a good way to ease someone into Apple’s ecosystem without costing them as much money.
Initially I was again the though of an iPhone mini, but the more I think about it, the more brilliant I think it is.
As long as the monthly service fee drops, I am all for it. Frankly, I would rather pay the cost of the device upfront and then pay for the service without embedding a subsidy charge (which never goes away, even if you don’t want a new phone).
I think you’re on the right lines.
Apple is a company that won’t hesitate to introduce a disruptive business model. Sell the phone itself directly to the consumer for what it truly costs and then the consumer makes an arrangement with any local telecoms provider that they choose.
Factor in the rumours about Apple introducing phones without physical SIM cards and you create a scenario where the consumer calls the shots, while the telecoms companies compete to merely offer a service. Maybe Apple will also offer a virtual service of it’s own ?
As usual, when Apple disrupts an industry, the consumers win.
Half the size.
Double the sales 😉
Funny how rumors morph: the original rumor said it would be a third smaller than the current iPhone, not half as big. Too picky? Maybe. Still, sometimes size does count. 😉
The rumors are the mini is going to be cloud-centric but unless it has apps, I don’t see how it’s gonna fly. Deep down we’re all app-holes.
The apps will stream from your home computer. Better yet, apple is the only purveyor of approved apps so they can just give you instant access to your purchased “license”.
Amen to that.
There is a huge demand for such an economy iPhone, especially for folk who don’t need loads of data downloads or make tons of phone calls, but they do want to carry a premium manufacturers product.
I went to radioshack today and started up a conversation about iphones with the 2 salespeople. They didnt even want to talk about apple or iphones. Android was on top of the world to them. they considered iphone to be a knock off of it and were expecting iphone to dissappear within a couple of years.
apple lets them sell iphones. they need to get out of that store. if it were up to the shack andriod would rule. their salespeople arent helping apple at all. and if android is growing, it is because of places like this
Stop picking on those Radio Shack twirps! They’re minimum wager kids. They don’t know any better! Radioshack is synonymous with TechTardiness.
Actually it could increase the iPhone market in Asia by 10 times. I read this article about how cost of iPhone is a big hurdle in iPhone adoption in asia.
http://techztalk.com/techwebsite/02-14-11-smaller-and-cheaper-iphone-will-be-a-boon-for-apple-in-asia
iPhone on a typical Asian hand looks like the Samsung Galaxy Tab on Westerner’s hand, their fingers, pockets and purses are smaller as well. My wife says the previous generation of iPod Nano is perfect size for a phone, but the screen could be a bit wider for the apps.
There isn’t a fig of imagination in the analyst’s mind. None whatsoever. Has anyone done a teardown of component costs in an iPhone? Try looking up iSuppli. What are the two components that contribute most to overall cost? RAM and screen totaling 50% with CPU/GPU bringing up the rear.
When you reduce the size of the screen by half you dont reduce the cost of the component by half simply because you haven’t factored in another element: volume production. By splintering the iPhone line you drive diseconomies of scale by not having volume and losing focus on the one thing Steve Jobs prizes above all: consumer satisfaction. Not sales numbers, not maximizing revenue; it’s consumer utility that’s paramount.
At the end of the day what drives iPhone adoption is fungibility in other words interchangeability in apps across Apple’s iDevices line so that you can load apps for your iPod touch and iPhone interchangeably driving down the cost of development, maintaining cross platform compatibility and commonality in user driven UI elements.
That’s why a 7″ iPad makes no sense and a 2″ iPhone is DOA.
But look at this:
1. AT&T already sells the iPHone 3GS for $49
2. Apple already sells the iPod touch with a much better screen and cpu for only $229.
3. The Verizon iPHone already has the combo CDMA/GSM chip.
4. Used, unlocked iPhone 3GSs sell for $300 to $400–demand is clearly there.
Put all that together and I think it is very reasonable for Apple to deliver a contract-free, 3GS-level iPhone for between $200 – $300 and/or sell the same for “free” through the telcos.
With only 4% of the market, Apple is already raking in 50% of the profit. Adding another 4% with a $200, unlocked GS-level iPhone would completely devastate the Android ecosystem–and every other smartphone ecosystem.
“Adding another 4% with a $200, unlocked GS-level iPhone would completely devastate the Android ecosystem–and every other smartphone ecosystem.”
But from what I’m reading, this ‘netbook’ iPhone won’t do apps! If that’s the case, it doesn’t compete with Android-whatever. It competes with Nokia-whatever.
No, I refuse to believe Apple will release any mobile iDevice that can’t do apps. That would virtually negate the entire advantage of their eco-system.
They might use the cloud to store your media-ebooks, music, movies, podcasts, etc.–but it will have enough memory to use some apps. I have 120 apps that fit in less than 8GB and I could get rid of about half of those if I weren’t lazy.
An iPhone nano makes sense if it has no data contract. It’ll simply make phone calls, text and have a bit of music, pics and a few vids. Maybe even a tiny camera. Think of it like a iPod nano with a phone in it, not a small iPhone with apps.
This rumor makes no sense at all. How would they fit a keyboard on an iPhone the size of a nano?
The iPhone nano is a bunch of twaddle, but if Apple can somehow manage to double revenue, I’m all for it. Knowing my bad luck, it probably won’t happen in my lifetime. I know that Apple is supposed to be partnering with Foxconn to open up to 500? (I’ve also read 100) Apple retail stores in China, so maybe they can use this mythical iPhone nano to sell to the poorer Chinese citizens.
I believe these analysts just like to throw big numbers around to get shareholders excited. I’m still waiting for some results on the Verizon iPhone, but apparently there are no significant sales figures as of yet, or somebody would be blabbing them all over the internet.
C’mon, Apple, just get it done or the share price is never going to reach $400.
Add me to the skeptical bunch. An iPod nano with a cellphone component made sense five years ago (after Motorola ROKR). Today, you can even get a touch-screen phone for free with a voice-only plan on some carriers in the US. In other words, small, cheap feature phones are for Nokia and Samsung. The world is increasingly buying smartphones, and I can’t imagine Apple making a smartphone that would retail for $250 or less, only require voice plan and still command Apple’s usual margins.
Then again, from Shuffle to touch, iPods vary in price almost ten-fold, and they all are making solid money for Apple, so I’m not completely dismissing it.
I’m sceptical this will happen, it’s like the Kin what killed it was that the data plan was nearly as much as a regular smart phone plan. Can’t Apple just put a GSM chip in the cheapest 4G iPod touch? This would make a killer texting tool.
Apple selling the ‘netbook’ of iPhones? I don’t think so.
I’m still waiting on the 7″ iPad rumor. Someone is laughing their ass off today.
A 7″ iPad with a retina display would allow Steve Jobs to save face on his 7″ tablet remarks. With the ability to pack more content into a 7″ retina display, you would no longer be required to grind your fingers down to navigate. With only 45% of the screen real estate but triple the resolution, the 7″ iPad no longer sounds farfetched.
Pre drag : you’re right on the money. And Apple should have done this a year ago.
Teenage girls of the world, rejoice!!!
This tiny iPhone rumor is a puzzler.
I could see how the iPad would work before launch but this one is harder. Can you effectively use such a small touch screen?
Perhaps (wild guess) it’s more of the cloud based thing people are talking about, a ‘music phone’ (maybe ‘mini’ apps) rather than a full app phone . Music etc will be in your cloud account and downloaded when needed. Apple usually doesn’t just go for market share but is driven by consumer need and profitability. The cloud thing might be profitable if it further locks in entry level consumers to Apple’s iTunes eco-system. Cheap music phones are popular everywhere and I think eats into iPod sales.
Like a Mini-Me.com?
I think you have it all wrong.
The iPhone nano will be the size of the new iPod nano. There will be a tiny camera above the square screen. It’s a video phone the size of a dime. You will be able to buy accessories that turn it into a wristwatch (already out).
Are you people serious! An iphone with no app’s, no camera, no wi-fi and small in size. There used to be plenty of phones like that not so long ago. What would be the reason for owning such a phone. I would not part with my cash for cheap garbage such as that; a so called iphone nano would go no where IMHO. I would think a nice midrange iphone as feature rich as is possible for current and futre apple users who want to buy in to the apple eco system. It’s all about the user experience.
Nokia seems to still sell a lot of those phone that “would go no where.” They probably sell more of those “dumb” phones in one quarter than all the iPhones sold since 2007.
That’s the target; people who do not want a “smartphone” (and associated high cost) yet want some of that Apple “magic.” They want to make phone calls, sent text messages, and listen to iPod. That’s a lot of people, probably more than all the current smartphone users x10. A “basic features” mobile phone (and media player) that worked through a bigger version of the iOS-like iPod nano multi-touch screen interface, would be pretty cool.
You may not buy it, but at this price it would be a “free” phone with any 2year contract on a carrier.
Think of it as a gateway device. Some people just want a boring old free phone and this would be snazzy and small and Apple.
I’m not certain it’ll happen, but it’s not completely preposterous. People still buy iPod nanos. What’s the “reason” to own those?
@quiviran,
So Totally right on. 6x the work, 2x the money. A big loss. Companies and Anal—yst still do not understand Apple…. or their own industry. 🙂
Just a thought,
en
“I think you have the essential point. Why would Apple go down a path that causes them to produce six times as many units to merely double revenue? And the profit per unit sold would be how low? Doesn’t seem like Apples path, somehow. “
I’ve seen it, and no, I’m not going to tell you where…
Think of an iPhone 3gs with the ends cropped: retina screen only with a new body design.
Makes perfect sense to widen / disrupt the market. Will be to the iphone 4, as the Macbook is to the Macbook Pro. It’s obviously the replacement for the 3gs… small memory but runs apps – so part of the the apple ecosytem. This will be HUGE so long as they give it the full iOS 🙂
A no-contract, $200, GS-level iPhone with dual GSM/CDMA chip would allow you to:
1. Sign up with either AT&T, Verizon or even T-Mobile. (Not sure about Sprint)
2. Pay month to month
3. Go with a voice only subscription and simply use wifi when you need data. (This is what lots of people essentially do with a dumb-phone/iPod touch combo.)
4. Still have access to Facetime and the app store.
5. Allow the carriers to sell “free” iPhones.
6. Would be a great phone for developing countries, developers and families.
7. Would be a great phone for business travelers.
8. Allow Apple to sell phones in every possible retail outlet.
9. Completely devastate the Android OEMs–With only 4% of the entire cell phone market, Apple is already sucking up 50% of the profit. A phone like this would let Apple suck about 80% of the profit out of the market.
I would buy three of these phones instantly and sign up with T-Mobile. I couldn’t care less about having a 3G data plan.
I don’t think Apple will make any phone that can’t use most apps or has a screen resolution less than the GS. Since Apple can already sell an iPod touch for $229 with a better screen and better cpu, a $200, GS-level iPhone seems very possible. Much more feasible than a retina-display iPad.
the more I think of it the more it definitely seems like a reality. as a gateway device and to increase market/mindshare it will be important. but the main reason I think this will be important is that apple will have a big push towards social applications and RFID payments. can’t wait to see what develops!