Can carriers handle a low-cost iPhone?

“iPhone is the most valuable device for the networks that carry it,” Ben Bajarin writes for Tech.Pinions. “Carriers have been in a transition the last few years to move their value from voice to data. The key for carrier services going forward is to capitalize on the consumer consumption of their data services not their voice services. Therefore device which are excellent at consuming data services are highly valued. This, as [Asymco’s] Horace [Dediu] points out, is the reason the carriers are willing to pay the high price of the iPhone and subsidize it to their customers.”

Bajarin writes, “The key question remains to the other devices, like Android, which certainly don’t generate the same ARPU as the iPhone (or specifically iOS). We know that Android devices are heavily skewed to the lower end of the market.”

MacDailyNews Take: Or, as we like to put it: The Hee Haw demographic.

Bajarin continues, “This market certainly behaves differently and although they browse the web and consume data, the evidence shows the engagement is less than with iOS… If Apple went low-cost and grew their market share substantially by catering to the low-end, bringing hundreds of millions of new iOS users onto the networks, I have a strong feeling it would put monumental stress on all current network infrastructure. Bottom line is, I’m not sure the carriers can handle a low-end iPhone.”

Read more in the full article – recommended – here.

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    1. Issue with China Mobile is network compatibility. They do have some GSM,,hence the few million iPhone users on the network. However, their primary data is TD-CDMA, which was developed with Siemens, I believe. I believe Apple and CHL are waiting for LTE variant to be deployed. Faster data, higher capacity networks. I have read there were also issues on who controls the App Store or perhaps revenue sharing..

      1. Revenu sharing or letting China Mobile have their own App Store will NEVER HAPPEN. I can assure you. If those are the terms I think Apple can and will do just fine without them. It’s not that hard for people to switch network if they want to. If they can keep their number it’s easy.

  1. I dont understand these articles. It’s called the iphone 4!!!!! The iPhone 4 (or 2 gens behind the newest iphone) is FREE when you get a data plan, which your going to get anyway. Am I missing something here? Or am I right to say that these editors, writers, analysts are not good at their job and need to be fired.

    1. Sorry Dave, I can’t do that.

      Apple has no free iPhones
      iPhone 4 User initial cost $0, carrier subsidy ~$450
      iPhone 4S User initial cost $99, carrier subsidy ~$450
      iPhone 5 16GB User initial cost $199 carrier subsidy ~$450
      iPhone 5 32GB User initial cost $299 carrier subsidy ~$450
      iPhone 5 64GB User initial cost $399 carrier subsidy ~$450

    2. Virtually nothing is free, ‘idiot,’ particularly items and services that are marketed as such. Even the term ‘subsidized’ is misleading when applied to cell phones with service contracts, since the cost is merely deferred through monthly payments, and the actual cost to the consumer is not reduced very much, if at all. Worse yet, that payment continues even if you do not get a new phone/contract. Many people end up paying more for their phones than if they had bought them outright at the start.

      Try buying a new unlocked iPhone 4 or 4S without a contract, Dave. They cost hundreds of dollars because you are buying a miniaturized mobile computer with multiple onboard sensors and a high quality touch display. They are *not* free.

  2. Contrary to what MDN appears to believe, there is a world outside of the USA, many of which yearn for Apple products. Unfortunately, many of them were born in nations that do not have minimum wages at subsistence level or business opportunities that provide the free cash flow necessary to purchase premium products. Unless, of course, Apple gets its act together and innovates.

    Jobs was smart enough to offer the iPod family.
    Cook can’t quite seem to grasp the concept of offering an iPhone family to serve the different needs of different Apple users around the planet.

      1. Apple’s strategy of continuing sales of older (if not quite obsolete) iPhones is not working. Android continues to nibble away market share just as Windows did 3 decades ago. Selling old stock is not a “family”.

        in other product lines, Apple offers:
        – iPod in 4 very distinct models: shuffle, nano, classic and multiple versions of the touch
        – iPad in 3 very distinct models: iPad2, iPad retina, and mini
        – MacBook Air in 2 sizes & several configs
        – Macbook Pro in 2 sizes and several configs, including retina display models
        – etc

        The iPhone “family”, in comparison, is composed of ONE current model and 2 older ones, none of which the average public can easily distinguish from the other. the iPhone 4, 4S, and 5.

        If Cook was serious about defending iPhone market share, he would offer at least 3 current models of iPhones with different screen sizes and distinct styling. My recommendation would be:

        – an entry-level, ultra-slim polycarbonate-bodied 3.5″ screen iPhone “mini”
        – an aluminum iPhone classic with refreshed iPhone 5 abilities, same size as today’s model but perhaps color options.
        – an entirely new iPhone Pro with updated styling and superior performance to anything on the market, perhaps with a 4.25″-4.5″ screen (but smaller than the bricks Samsung makes).

    1. Apple doesn’t sell cheap crap.

      You can get a low end phone for free as in pay for calls only.
      You can get a small, 4 GB digital MP3 music player for $15 or less.
      You can get a camera for less than $30.
      You can get a netbook for $200 or less.
      There is a world full of cheap crap.

      Apple doesn’t sell cheap crap.

  3. I think everyone isn’t touching (or are dodging) the main point. Low-cost UNSUBSIDIZED phones for pay-as-you-go plans. iPhone 4, 4S & 5 don’t really fit in this category. That’s what a low-cost iPhone is about. If these rumors become an actual product, it will definitely boost Apple’s hee-haw demographic.

    Hope this helps the people who don’t get it while they sip their mocha lattes in front of their 80″ flat screens. (The “shit on the poverty stricken” demographic) 🙂

  4. Yes, they can handle it!
    Verizon sold several million cheap iPhones last quarter. IPhone 4 and iPhone 4S is performing very well for Apple. I wonder when analysts with their superior intellect will get that a cheap iPhone is already here and yes the networks can handle it very good than you.

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