Analyst: Apple ‘Mini iPhone’ a question of ‘when, not if’

“The iPhone has a ‘long runway,’ Oppenheimer & Co.’s Ittai Kidron suggests, and the iPad an even longer runway, with the prospect of a ‘mini’ iPhone, and competitors playing catch-up to the iPad, with no room under Apple’s ‘aggressive’ pricing umbrella,” Tiernan Ray reports for Barron’s. “The mini iPhone, in fact, is a question of ‘when, not if’ there will be a lower-cost version of the device, especially for emerging markets and into the ‘mid-tier’ of the phone market. It makes sense, he argues, for the iPhone to follow the iPod ‘found its way into lower price tiers.'”

MacDailyNews Take: In its most basic form, iPod simply plays sound. The iPhone, of course, does much more. It’s easier to shrink sizes, reduce or remove screens, and reduce prices with an iPod than it is with an iPhone. After all, make the iPhone’s screen any smaller and you lose most of what makes an iPhone an iPhone. You’ll be left with just a phone and there’s nothing much unique about that. Making something just to slap their logo on it isn’t Apple’s style. Now, we do see an opening for an iPhone with a larger-screen which could co-exist with current screen-size iPhones that’d be renamed “iPhone mini” or “nano” or whatever. Any “Mini iPhone” smaller than the current iPhone 4 would have to offer something unique (or at least worthwhile) to users or Apple won’t produce it.

Ray reports, “The iPad will probably retain a ‘commanding share in the space and leave it somehwat insulated from the wave of tablet competition,’ writes Kidron, given that Apple’s first-mover advantage could be a bulwark as in the iPod market, with ‘mindshare hard to break.’ …Kidron offers a prediction for 73 million iPhones to be shipped this fiscal year ending in September, and 28.5 million iPads, which is in line with to slightly below other estimates I’ve seen. For fiscal 2012, he’s modeling 97.6 million iPhones and 44 million.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

29 Comments

  1. he will remodel. iPads sold this Q will be at least 13 million. Add to the 12million already sold in the fiscal year, 28 million for FY2011 is ridiculously low. They are still lowballing apple. They cannot accept a zero sum fir the iPad.

    iPad demand is currently running at a 100 million per year rate. Apple is being careful and will not ramp up until more clarity develops. By next Q, the production run rate will be at least 20 million per Q. Still below demand. You can iCal this.

  2. I think an iPhone could still be useful, and quite popular, at maybe 80% of its current size. If you shrank 80% in each dimension that’s just over 1/2 the volume, enough to really differentiate it but useful enough especially for small people with small fingers. So I disagree with MDN take here, I expect there will eventually be 3 sizes of iPhones, not two.

  3. It may be smaller, but I doubt Apple would go below the original iPhone screen resolution. They will want to leverage the app ecosystem with any new iPhone versions.

  4. Wrong. A “less expensive” iPhone is already on the market (3GS), but a smaller iPhone nano makes no sense. The screen is too small to make apps usable.

    My daughter’s iPod nano is nice with its small size and touch screen, but beyond the controls it’s useless for much else.

    I don’t think Apple should call a larger iPhone the iPhone Maxi, iPhone Largess, or the iPhone Lane Bryant. Just not good marketing.

    1. I think there is room for an iPhone Pro . . . just a wee bit bigger screen and a few more extras . . . going below the GS is just silly . . . since the price point is already $49 (yes I know that’s without the contract . . . but all phones have contracts . . . so the real added cost is 12 x $15 for data or $180) Seems like if you can get the data cost lower you already have an iPhone nano.

  5. The screen size will NOT go below 3.5″. Apple would be stupid in doing that.

    What they may do is shrink the bezel to its limit and use 3GS hardware in it. They can sold it as a smaller, cheaper iPhone for $200 off-contract.

    They can then maintain screen resolution on the iPhone 5 while expanding the size to 4″. PPI would lower, but would still classify as Retina. The iPhone 5, needless to say, would get all of the novelty stuff and be sold with contract.

    Because, let’s face it, no one needs a smaller iPhone. The main barrier for Apple to sell more iPhones is contract price. And he 3GS, while obsolete, is still capable everything essential to the iOS experience. Cheap, outdated but capable hardware + equally cheap price – contract = No reason to settle for a pretend iPhone = Apple’s market share explodes = iPod all over again.

    1. Wrong about one thing. The main longterm barrier to iPhone market share is lack of hardware differentiation. Phones are not just tools, they are fashion accessories, and the number of people who will carry the exact same model of phone that everyone else has is limited. It may be nowhere near saturation yet, but it’s well under 50%. Is there any other product everyone lets themselves be seen with every day, where everyone has even the same brand, much less same model? This is why Apple will eventually make a smaller (as well as larger) iPhone, even if nobody “needs” it. Because let’s face it, nobody “needs” an iPhone at all… It’s all about making people Want it.

  6. if an iPod touch can be sold successfully for $200+, then a “basic” iPhone (even with only EDGE) for prepaid markets could sell like hell at $300+. This could replace the 3GS and use a similarly “cheap” casing (compared to iPhone 4).

  7. ” “The mini iPhone, in fact, is a question of ‘when, not if’ there will be a lower-cost version of the device, especially for emerging markets and into the ‘mid-tier’ of the phone market. It makes sense, he argues, for the iPhone to follow the iPod”

    I do not agree with the reasoning. First, Apple and other companies are trying to pull consumers up to pay for “smartphones”. Making a smaller, and functionally compromised iPhone, would simply be chasing a market segment they want to get rid of. Second, the real cost and profit are not in the hardware, but the contract and apps (and, for profit, ads). For a device with a screen significantly smaller than the current iPhone, do the same apps work? Is the data contract justified if web browsing is not workable? Probably no to both.

    I think Apple will stick with just lowering the prices on previous versions.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.