“Apple may be plotting a low-cost iPhone — most likely the 3GS — in a move to tackle emerging markets, prepaid plans and midmarket customers,” Larry Dignan reports for ZDNet. “If this working class iPhone hits the market it will be disruptive to Android as well as Research in Motion, which is living off its low-cost Curve.”
“Jefferies analyst Peter Misek works through the math and concludes that Apple can hold profit margins as it increasingly tiers it’s iPhones,” Dignan reports. “At Apple’s developer powwow next week, Apple is expected to highlight the iPhone 4S update. An iPhone 5 will come in mid-2012.”
Dignan reports, “However, the most disruptive move would be the iPhone for the prepaid masses. Note that prepaid is the only part of the wireless market that’s poised for growth and Android devices and RIM’s BlackBerry Curve occupy a lot of shelf space.”
Read more in the full article here.
MacDailyNews Take: Go for the jugular, Steve!
Seems the title should be for the non-working class.
Most people I know with iPhones are blue caller.
I know a few White collar workers who call me when their blue.
I thought blue callers used 900 numbers.
Nope. Those are Red Necks.
wrong, they are blue-balls
since when is pre-paid the ONLY part of the wireless market poised for growth? i thought the smart phone market was also growing.
If Apple finds a way to offer a 3GS with a Walmart like $45.00 a month all you can eat plan … GAME OVER ((:
I think Apple would be better off with a prepaid phone that could run on multiple carriers. Instead of bying an iPod Touch people who don’t use a cell phone that often nevertheless have a cell phone and with the addition of a softphone can make cheap calls wherever they have access to wifi plus all of the other features of iOS devices.
A monthly contract at even $45.00 would not be the way to go.
In my jurisdiction, every phone is pre-pay or contract except those for which the sole marketer offers only contract. (Read: iPhone only! Thanks, Vodafone, you bastards.) Removable SIM card and under $150, I’ll be there immediately.
Paraphrasing the sales geezer in Rain Man, “I’ll buy that for a dollar!”
Ain’t that in Robocop?
Robocop it is. “You have 15 seconds to comply!”
I’m travelling to the USA in Spetember (Deep South tour) Will I be able to get a prepaid or pay as you go micro SIM for the iPhone 4? Am I better bringing my old iPhone 3 if normal SIMs are more plentiful?
Yes, easy to get. Just walk into any carrier that has iPhone and purchase a pre paid micro sim.
I might be a Canadian but i have done this as well.
Thanks, I wasn’t too sure, with USA iPhones being locked to two carriers
“There’s room at the top they are telling you still,
But first you must learn how to smile as you kill,
If you want to be like the folks on the hill,
A working class hero is something to be.
A working class hero is something to be.”
But if he goes for the jugular, It could cause a BloodBath.
It will be interesting to see if the 4Gs rumors hold true as 3Gs is still an AT&T only product. A 4G for $99.00 and that said $45.00 a month all you can eat plan … BOOM goes the Dynamite!!! ((;
The problem with all current iPhones, including the $50 3GS is that they are still significantly more expensive than the budget androids and Nokias. Before subsidy, even the cheapest 3GS is still at least $450, whereas you can get a pre-paid Android phone for as low as $150 (LG Optimus M on MetroPCS), and a $50 monthly plan.
The point is, until there is an iPhone that actually retails for less than, say, $250 (BEFORE subsidy), with a plan that is less than the current minimum of $55 on AT&T (which does include subsidy, in all fairness), HTC, LG, Samsung and Nokia will continue to sweep the bottom end of the smartphone segment; not that there’s any major money to be made there, but market share numbers will continue to give them visibility.
Apple has a particular brand identity to preserve. A cheap prepaid iPhone, sitting on a low traffic store display, would undermine both image and revenue goals. If you observe the floor traffic in a Best Buy (example), it is not flocking to prepaid phones, or even prepaid cards. Apparently, the so-called working class has enough cash-flow and options that prepaid is not a priority.
Thank you, iNeuron! Finally the voice of sanity!
Everyone who wishes for cheap junk should go out and buy other phones. Let Apple continue to build quality products and charge a fair price for such quality.
The agressive pricing on the iPad suggests that Apple may be able to produce a lower cost prepaid iPhone of great quality. Think of an iPod Touch with a cellulary chip. That would provide a great option.
And the sales volume could be huge-even if the profit per individual device may be less.
Whether at that point the iPod Touch would remain as a separate device or whether it would merge into the prepaid iPhone remains to be seen. Just as Apple added lower cost good quality iPods to it’s line of iPods the same could be done with the iPhone.
These lower cost items also become stepping stones for other Apple products.
No one is talking about selling junk products. It’s always about quality and useability first. To quote “The quality goes in before the name goes on”. In Apple’s case that is generally thecway it is!
@ Applesmack: quality in first? Funny, some of us once thought the same about HP. Sad thing is, however, that engineering to meet certain price points ALWAYS results in compromised product quality. The iPad was priced aggressively to enter a new marketspace — hardware margins are nonexistent, as Apple makes significant revenue from apps.
As for quality decline: whether or not the end user notices or cares is another discussion entirely, but it’s a bad road to go down. Soon the marketeers control the company, not the engineers, and we all know how that turns out. Jobs himself famously warned against it.
Lately Apple has done a very good job maintaining a balance between quality and pricing, so i wouldn’t call on the mob for expert marketing advice. All consumers always want cheaper prices. As a sharehold, I want Apple to retain premium pricing via quality, as that yields significantly greater company profits than just about any other hardware manufacturer in the business.
Peter Misek better check his math, Why would the working class people choose Aplle”s toy phone over Rimm;s phone. They are working people and have no time for playing games.
You should check your punctuation and spelling. iPhones are more business-savvy than they are game-players. I use mine all day for business, entertainment, news-reading, social-interaction, etc…
There is a very healthy market at the bottom of the mobile phone price range. While smartphones are rapidly growing as a segment, large majority continues to buy free with plan phones and $40 per month plans. More importantly, there are those budget prepaid carriers (Boost, MetroPCS, Virgin Mobile, Tracfone, etc) who have recognised the consumer need for cheap phones and (more importantly) plans, and are meeting that need with smartphone plans that start at $25 per month (unlimited data/text + 300 mins of talk on Virgin Mobile) and go to about $50 (unlimited everything), coupled with cheap smartphones (starting at $150 and going up to about $300). There are the real poor man’s iPhones, and there many people who use them. There are working people, and they do sometimes play games (Angry Birds works reasonably well on pretty much all of these Android-based smartphones).
If a pre-paid iPhone is revealed, the main market will not be North America, but rather Asia. Specifically China where pay-as-you-go is the norm.
I can’t help thinking of when Steve Jobs said “We don’t know how to build a sub-$500 computer that is not a piece of junk.”
Apple has an image to maintain – an image that it produces the highest quality products at a fair price. A cheap iPhone would eat away sales from the traditional iPhone and has thr danger of cheapening Apple’s image.
Unlike a cheap iPad which is the cheapest product in its market?
The iPad is less expensive due to smart business strategies. Steve made sure he got bulk pricing on the best equipment and took all he could get. Leaving all competitors to pay more for whatever was left.
I’ll bet Steve used the gom jabbar and the Voice to get his way.
Why do people think Apple wants to lose money gaining market share.
Where’s the profit in that?
“. . . as it increasingly tiers it’s iPhones . . .”
And we’re supposed to lend credence to a writer who can’t tell the difference between “its” and “it’s”? What ELSE can’t he differentiate between? Profit and loss? Buy and sell? Wealth and poverty? Gawd.
Haven’t they been “disrupted” enough?
😉