“Apple will probably not introduce a second new iPhone alongside a normal flagship model at next week’s press event, two analyst memos say,” MacNN reports.
“We expect Apple to continue with a lead device (iPhone 5) that carriers sell subsidized for $199/$299 along with a previous generation device (iPhone 4 or iPhone 4S) for $99,’ says Piper Jaffray’s Gene Munster,” MacNN reports. “His view conflicts with some recent evidence and a Deutsche Bank memo suggesting a 4S that could sell for between $300 and $350 unlocked, about half what Apple normally charges for an unlocked iPhone.”
MacNN reports, “UBS analyst Maynard Um doesn’t mention a cheaper iPhone at all, referring only to an iPhone 5. ‘We believe a refreshed iPhone 5 will boast enough physical improvements to drive another strong adoption cycle,’ he says.”
Read more in the full article here.
Related article:
It’s official: Apple announces ‘Let’s talk iPhone’ event on October 4th – September 27, 2011
We’re supposed to be surprised at this revelation? Why anyone imagines Apple will change direction when they can happily carry on as before and just introduce one new phone at a premium and carry on selling a lower capacity version of the existing phone at a lower price on cheaper contracts or PAYG is frankly quite beyond me. Apple are still selling 3Gs phones, imagine how many 4’s they’ll sell as a cheap PAYG. It’s a fantastic phone, people will be gagging for a more affordable version.
The fully subsidized iPhone is VERY profitable. I doubt that Apple will release any iPhone that is like the current iPhone 4 that is sold unlocked for “about half what Apple normally charges for an unlocked iPhone.” That would be like Apple intentionally competing with itself and cannibalized sales of its most profitable product (with a lower profit product). Dumb move – Apple is not dumb.
It is possible that the iPhone 4 (or “4S”) will continue as a fully subsidized choice for $99. That’s not much of a stretch, since the iPhone 3G was sold for $99 alongside iPhone 3GS, and the iPhone 3G is currently sold for $49 alongside iPhone 4. And Apple makes about as much profit per sale (if a customer chose it instead of the new model) because of the same large subsidy payment from the carrier.
I’m looking (hoping) for something conceptually different, a lower cost “iPhone” that is not an iPhone. A customer who wants a “real” iPhone would not choose it instead (so no cannibalization). But it would be loved by the tens of millions mobile phone customers who do not currently consider an iPhone due to total cost. That would be Apple’s phone sold unlocked, or subsidized for low cost (or “free”) with two-year contract. Instead of cannibalizing sales from the highly profitable flagship iPhone, it would expand Apple’s mobile phone reach beyond its current “high-end” market.
I think the current iPhone 4 model will go away and the 3Gs will remain the low end iPhone. I find it hard to believe that the retina display will be in the low end phone as it is an attraction to the iPhone 4 from the 3Gs right now. I also don’t see Apple taking the iPhone 4 and dumbing it down or putting lower quality or cheaper components. That doesn’t follow anything they ever done with any product. The current model will go away completely from production. Just my opinion.
It is possible that the iPhone 3GS could be offered as an unlocked, off-contract phone in a pay-as-you-go plan, with the iPhone 4 being sold for $49 (I doubt Apple would raise the price back to $99 unless more memory was included), and then the iPhone 5 at $199/$299. But not very likely.
One thing these analysts forget is that Apple is not out to sell an iPhone to every person on the planet. Apple is out to make money off of selling iPhones, and that means some people won’t be buying one because they just can’t afford it. Apple also refuses to sell its devices at little to no profit simply to gain market share, instead letting the quality and capabilities of its products be the selling points to consumers over price.
Gee, I think it’s working rather well. Or do these analysts know more than the most valuable company in the world?
The iPhone 3GS definitely goes away, I think. As long as it is sold as a “new” iPhone, Apple is obligated to support it with iOS upgrades, probably for at least two years (the length of contract). They are still being sold right now (for $49 with two-year contract), so that would mean iOS 5 supports it and iOS 6 supports it (at least partially).
I think Apple wants to consolidate on all supported iPhones having a Retina Display, 512mb (or more) system RAM, and A4 (or better) as soon as possible. So if Apple stops selling iPhone 3GS right now, iOS 7 (in 2013) may have those system requirements. Continuing the iPhone 3GS is a hinderance to iOS advancement.
What I think Apple should do is release a mobile phone product that is “smart” but is NOT an iPhone. It may be called “iPhone something,” but its design and marketing will set it apart from a “real” iPhone, away from customers who want a “real” iPhone, and toward the “feature phone” crowd. It will have a very desirable set of built-in features (apps) that Apple provides, but it will not be not “expandable.” It may get “firmware” updates to correct bugs, but not updates that add new features.
A newer (next year’s) version of the phone may have new features, but the older version does not get them… What you buy is what you get for the life of the phone, like every iPod except for iPod touch. In this way, Apple can sell an affordable less powerful phone that does a desirable but limited number of things very well, AND not be obligated to support less powerful hardware with iOS upgrades. iOS can become more focused on “powerful” iPhones, and NOT be held hack by the needs to support less powerful hardware.
These guys are saying the same thing from different perspective. Deutsche Bank is referring to how much apple will charge for the cheaper model phone versus Munster that is referring to how much people will pay AT&T or Verizon since they will subsidize the cost of the phone heavily.
I suspect a new iphone 5 will be about $649 or $699 from Apple but $499 from AT&T or Verizon or Nextel. I would not be surprised to see a retail price of $49 for a low end version of iPhone when sold through say carriers in US and in other countries. Apple may have multiple low end models unique to different technology such as CDMA, etc…
Who in their right mind would be an Android if they could afford (perceived or real) an iPhone. Remember how the $49 3GS allowed AT&T to outsell Verizon this year.
I for one am tired of hearing how droid phones outsell iPhone when pundits ignore profitability, multiple vendors, multiple carriers, etc…
I think it is time for an unsubsidized, unlocked off contract iPhone at iPod Touch or near iPod touch prices. It could even be an iPod Touch phone or iPhone Jr etc.
I think their is a big untapped market for this in the US and around the world. Apple will find a way (high volume) etc to makea decent markuo and still make money. See iPad for example.
Those who need a full boat iPhone 5 with contract will buy those, so I am not concerned about cannibalization, any more than Apple is worried that iPad will cannibalize Mac sales. It may grab some sales, so what.
I think an inexpnsive iPhone would be most likelyto take sales from iPod Touch.
The important think is to attract new customers.