Apple: Low-end iPhone needs to be 'category-killer experience'

Apple: Low-end iPhone needs to be 'category-killer experience'

Summary: Apple execs don't seem to be keen on releasing a more budget-friendly iPhone unless it can wipe out the competition.

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Although there have been many, many rumors for months about the iPhone 5, one that seemed to stick out was the story that Apple is planning to release an unprecedented two iPhone models this year: the fifth-generation of the traditional iPhone as well as a lower-end model. It could even be as low as a pay-as-you go device like the recent Motorola Triumph for Virgin Mobile.

However, based on a conversation between RBC Capital’s Mike Abramsky with Apple’s COO Tim Cook and CFO Peter Oppenheimer, Barron's reports that "Apple’s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience."

This could hint at a number of things. Either Apple was actually already considering developing a low-end iPhone, or it just heard about the rumors like everyone else and still mulled over the concept. However, it does not sound like anything is actually in development yet. It is possible we could see a low-end iPhone in the future, but it is more likely that Apple is just focusing on the iPhone 5 at this point.

Another question is, does Apple even need to bother with having a low-end, second iPhone model at all? Techinically, there are already two iPhones available for purchase still: the iPhone 4 and the heavily-discounted iPhone 3GS, which is really a steal when you think about it.

Apple is already at the top of the global smartphone leader board based on recent reports from the IDC and Strategy Analytics. Apple's already obviously doing well with just one iPhone. Perhaps it could save some of that innovation for other products.

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Topics: Smartphones, Apple, Hardware, iPhone, Mobility

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17 comments
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  • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

    Yes, why bother with a second phone? All you need is the iPhone 4 discounted to 3GS levels when the 4G or 5 comes out. The main problem with any smartphone is the data plan, something that not everyone wants or needs. Make a WiFi only version of the iPhone and maybe you have a winner (or this could be the rumors of the iPod being updated to include a camera and microphone).
    hjenkins1
    • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

      @hjenkins1
      "The main problem with any smartphone is the data plan, something that not everyone wants or needs"

      I don't understand why anyone would want a smart phone without a data plan. A wifi only phone would just be a too small tablet. Not everyone needs 4G but coverage and battery life are more important for most than pure data speed.

      My wife bit on the Virgin Mobile Triumph $35 a month plan. I'm sure she'd have gone for the iPhone equivalent if there was one. It was the $35/month no contract that sealed the deal and she just got the "best" phone they had on the plan.

      I played with it some last saturday, 3G is too slow for youTube etc. But its fine for downloading Emailed photos or documents. Using our wifi N, its 4.1 inch screen is a too small tablet, but I enjoyed watching youTube clips during commercials :)

      Hey it is a good phone too, much better than most in terms of voice quality. But I'm sticking with my $100/year pre-paid burner as there just isn't enough value in a smart phone for me to spend 4X more to have one.
      wkulecz
      • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

        @wkulecz

        A wifi only smart phone would be perfect for me, I guess it depends where you live but in most major cities you're never that far from free wifi. Would be nice to not have to carry two devices.
        OffsideInVancouver
    • iPhone 4 has still and a lot of glass, both of which too costly for cheap

      @hjenkins1: ... iPhone. There were leaked photos of phones which look like iPhone 4 but with plastic insead of glass. Not sure if this is real, but at least this variant is cheaper to produce than current iPhone.

      In my opinion, best variant would be to keep old iPhone design, introducing <b>"iPhone classic"</b>, which will be updated iPhone 3Gs, and iPhone 5 which will look like iPhone 4.

      However, what Apple thinks should be seen; lets wait for the announcement.
      DDERSSS
    • The Wi-Fi only version of the iPhone is called the iPod Touch

      @hjenkins1 nt
      wackoae
      • Not exactly.

        @wackoae You can't make a phone call from an iPod touch. An iPhone with no data plan would be like an iPod touch that could also make phone calls - which would be useful for people who are mainly iPod touch users because you would not have to also carry a separate phone.
        cornpie
  • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

    Apple has no reason to make a low end phone especially when they know people are willing to pay $600 for one like when they first launched.
    LoverockDavidson
    • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

      @LoverockDavidson
      This. People are dumb.
      Droid101
    • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

      @LoverockDavidson

      While there are many people with limited financial means have found ways to pay for iPhones and their plans (against better judgement) with Verizon and AT&T, the reality is, there are allot of people out there who can't afford it, or simply choose not to pay the price. Even if these people can find $49 for the 3GS, the price of the voice/data service might still be a dealbreaker.

      A cheaper iPhone with a pay-as-you go plan would open the door to these potential customers. Plus, it could be a way to get the iPhone onto carriers beside AT&T and Verizon without straining those relations.
      TroyMcClure
      • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

        @piousmonk An honest problem - and no one flag me for this! :-) - is that Apple is considered a "high-end", "boutique", "designer" brand. If everybody can afford to have one, it loses part of its appeal. Shoppers identify with - and identify themselves - with brands, and part of the image would be lost. This is as much a problem with Wal-mart trying to go upscale as it is for Apple to go downscale. Pontiac helped kill of their brand in the end by deciding they needed a model for every segment and rebranding other GM models with their Pontiac brand, diluting its image as the "excitement division". What would it do to Cadillac if they opted to market a car to compete with the Civic?
        jgm@...
      • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

        @piousmonk
        They want to lock in that market for the $600 phones because they know their die hard fans will raise the money for it one way or the other.
        LoverockDavidson
      • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

        @jgm@? Cadillac actually did just that in the 80s. There was a rebadged version of the Caviler, with a substantially higher price. It was called the Cimarron. http://images.businessweek.com/ss/09/10/1028_50_ugliest_cars_of_past_50_years/21.htm
        Rick_Kl
      • Yes, but that kind of thing almost killed them...

        @Rick_Kl There was a reason Cadillac made a comeback. It was getting back to their core market of higher end cars and ditching the re-badged econo-box that got them back on track.
        cornpie
      • Why would we though????

        @piousmonk

        Why would I part with that cash just to have an iphone. Get over the hype and face the reality; the 4 on 3G and bluetooth does a days work for me on a charge. Thats RUBBISH and my personal HTC wildfire is lasting 3 days. My apps on the Wildfire are varied from wifi tests, signal finders to social, and play. Thats all I need and my iphone now has no sim as I only use it for testing corporate apps.

        Most 'sheep' have no need of an iphone but 'believe' the hype, and I would have said that the ipod/itunes functionality was a good reason for going down that route in the past. However I was pleasantly surprised to see the HTC synch now does itunes if needed (I dont but handy for the kids; i synch by folder).

        So... apart from the hype. Why should anyone buy an iphone 'lite' and look like they can't afford the real deal; especially when there are real viable alternatives out there. I'm saddened by the anti 'aynthing not Apple' zealots that live around these threads and just wish everyone could be happy with their chosen tool.
        johnmckay
  • The thing is .... they don't need to.

    Apple is making a killing on the smartphone market while everybody else is scrapping for the leftover at the bottom of the barrel.

    So besides having more users, what would be the business justification to fighting for the scraps with everybody else?
    wackoae
    • HTC, Samsung and Motorola don't look to be

      @wackoae
      scraping for leftover at the bottom of the barrel. They all appear to be making good money.

      Heck, HTC is reporting record growth of over 83% from last year.

      So if that's "looking for scraps" maybe it's time I start looking myself!
      William Farrell
  • RE: Apple: Low-end iPhone needs to be 'category-killer experience'

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