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Topic: Apple

Apple's iPhone 4S is swell, but pricing is the real killer app

Summary: Apple's iPhone 4S has some killer features, but the real neutron bomb on the industry is the price points for the latest device, iPhone 4 and iPhone 3GS.

Larry Dignan

By for Between the Lines |

Apple launched its iPhone 4S with availability on Oct. 14 and preorders a week earlier. In short, the iPhone 4S is impressive and its killer app may be voice integration throughout the device. The neutron bomb against the competition boils down to pricing.

Here's the rundown:

  • The iPhone 4S starts at $199 for a 16GB device.
  • The iPhone 4 moves to $99.
  • And the iPhone 3GS is now free.

In other words, Apple hit every price point to appeal to emerging markets as well as mainstream cost-conscious folks and early adopters.

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That pricing is going to add up to a lot of volume. In fact, AT&T has been able to fend off Verizon with the iPhone 3GS at $49. Rest assured a price such as "free" will keep those low-end devices moving.

For other folks---including a few of those who didn't want to give up the iPhone 4 in the first place---the $99 version of the device may ramp volume more than today.

Now the big question here is whether the iPhone 4S is worth the upgrade. The reality may be that it doesn't matter what consumers and tech pundits think. Apple will generate more than enough volume from the iPhone 4 and iPhone 3GS to offset any hiccup.

In many respects, Apple has set it up so families can buy into the ecosystem. Maybe IT manager dad gets iPhone 4S, his wife gets iPhone 4 and the kids get the iPhone 3GS. Apple obviously sees the potential in family plans---it has a Friends and Family app that can keep tabs on relatives.

The impact on the competition will be notable here. The iPhone 4S isn't 4G, but consumers may not care. Why? With a starting price of $199, the iPhone 4S already undercuts more expensive LTE devices such as the Droid Bionic. The iPhone 4 largely matches feature phones. And the iPhone 3GS is now a prepaid customer's dream.

Bottom line: Apple announced a good bit today, but the pricing is what's going to have the largest impact.

More:

Topics: Apple, Hardware, iPhone, Mobility, Smartphones

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182 comments
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  • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

    This is smart. Shows Apple learned its lesson after it lost the desktop OS wars to Microsoft (the lesson being: don't ignore price conscious consumers... have a product for all price points). A $99 iPhone 4 should win Apple lots of customers.
    dsf3g
    Reply Vote

    • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

      Really, pricing is the big news?
      The 4S will be sold at the same price points as AT&T sells the iPhone 4 now. 16G-$200, 32G-$300. Now they go higher: 64G-$400.
      Last year's model (3GS) has been selling for 8G-$50. The 'new' last-years-model, iPhone 4, will sell for $100. Ok, the old, 2-gen back, model will be completely subsidized.
      The new generation is so weak (no 4G), that they can afford to continue selling the old generations. That's not a killer app.
      iash2n
      Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @iash2n
        You missed it didn't you. G4 is fast but also drains phones in less then a day. Using the duel G3 they can get similar speed with less energy drain. It will be interesting to see battery life on these units but I will bet it is far better than a 4G.
        KBabcock75
        Reply Vote

      • Current 4G in phones is unworkable.

        @iash2n

        Unless you want to carry 2-3 extra batteries. Good thing it does not have it until they get the tech working reliably.

        My 2 friends with the Thunderbolt almost never have the 4G radio on. Much like mobile Flash. Works great if you don't use it.
        Bruizer
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @iash2n - Apple could have easily given their customers a 4G phone, but they didn't want to slightly increase the thickness of the iPhone by a hair to make room for a suitable battery to make your 4G last all day.

        And of course, the fan boys applaud no 4G because "it would kill the battery". Well not if they increased the size of the phone to allow for a bigger battery.

        Seriously...you fan boys would rather have a slightly thinner phone with less features than a slightly thicker phone with all the features you could possibly want?

        If so, that's fine. But stop thinking you own the best smartphone out there, because Apple's "form over function" stance, puts them behind a number of better Android phones. It's been that way for quite a while now.
        Xander_Crews
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @Xander_Crews Heres a clue for you, what you might find as essential doesn't appear to be what the vast majority considers to be so. You sound like you feel you have to have 4G but I would bet that even without it the 4S will out sell all the other high end Android phones combined just like the 4 did. That right there should tell you that it's not just fanboys that are buying and the average consumer (the vast majority of the market) don't care much about spec sheets, they want the phone they like the best.
        non-biased
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @non-biased - Not saying you're wrong and I am not a fangal in either court but I have a request please. I wonder if you have a link to anything proving the Iphone4 outsold all Android phones combined so I can point to something if I use that little soundbyte? All info I have points to Android smartphones outselling IOS smartphones as a whole since August of last year so this is news to me. Again, I'm not being snarky, just wanted to be able to present the evidence.
        MellyCait
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @KBabcock75 Glue is fast; rockets are swift; pizza is speedy; birds are quick; deeds are hasty; motes are fleet.
        ​
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @Xander_Crews thickness -> width, heihth
        ​
        Reply Vote

    • Dud

      @dsf3g
      How long will updates support the 3GS?
      Good single core and almost free dual core Android is already out.

      What kills me is the cost difference for mem!
      $100 for your second 16gb, then another $100 for 32gb more. OUCH!!!! I can buy the whole 48gb in class 6+ micro SD for less than the first $100.

      This is a serious case of "looks good" till you really start looking at it.
      Sellers today are looking at 4"+ screens and 4G ([i]HI SPEED - GET IT HERE!!![/i]).

      Like I said in the title.... dud, :|
      rhonin
      Reply Vote

      • Screens > 4" and 4G are non-starters for most.

        @rhonin

        4.3" screens are clumsy and don't fit in pockets well. 4G still has serious issues with battery draw.

        Good for spec sheet featuritis people but not for the vast majority of people.
        Bruizer
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @Bruizer<br>You don't have any idea what you are talking about do you? I own a Droid X and have no problem pocketing the phone. As far as the battery goes, you can always plug it into an outlet to recharge it. <br><br>Having a 4G hotspot IS a big deal. As a matter of fact, if Apple had announced the 4S as an iPhone 5 with 4G hotspot capabilities, my guess is that you would be praising them and drooling to get one.<br><br>Apple fanbots got a kick in rear from RIM, I mean Apple. LOL!!
        ryork272
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @rhonin Funny how you knock the 3GS but since it has been available on AT&T at $49 it has out sold all Android phones on AT&T combined. We will probably see the iPhone 5 next June then the 4 will be free and the 4S will be $99.

        [i]Sellers today are looking at 4"+ screens and 4G (HI SPEED - GET IT HERE!!!).[/i]
        There is a major problem with your statement here. You mention what sellers are looking for but you need to focus on what buyers are looking for.
        non-biased
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @ryork272 [i]As far as the battery goes, you can always plug it into an outlet to recharge it. [/i]
        Just thought I would quote that since one of the biggest Apple hater talking points is no swappable battery but clearly as you point out you can just plug it in.
        non-biased
        Reply Vote

    • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

      @dsf3g <br>The "free" and "$99 models ONLY are the bottom end 8 gb models ONLY way to get the price is to buy an outdated useless model too small with storage to be of ANY USE. With apple steadfastly refusing to integrate a SD card for additional storage, these units SHOULD be GIVEN away free, and UNLOCKED they are SO USELESS. They represent a DELIBERATE false and misleading advertisement, and should be prosecuted as such. to pay over $500 US Dollars for a unlocked 8 gb iPhone 4 is senseless. You can buy these 32 GB model where i live, in Ukraine (and/or in Russia, Belarus, Georgia and Germany) for the equal of approx $259 ! WHY would anyone other than an American who is still under the ATT monopoly chose to buy APPLE iPhones this way????? Even an American can ORDER ONLINE an unlocked iPhone from Britain and several other countries delivered to the USA for under $300.
      LyonsAireCEO
      Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @LyonsAireCEO Based on your little rant it appears you need to get back on your meds. Once you have done so please come back and post something relevant.
        non-biased
        Reply Vote

    • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

      @dsf3g
      Introducing the new RIM!

      It seems to me they are acting more like RIM than Apple. Isn't this RIM's strategy....come out with new models that are minor improvements over previous ones and lower the price/give old ones away. This worked for years until the old models became boat anchors and the competition blew past them. It could happen to Apple.
      ryork272
      Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @ryork272 Yes it could but I bet Apple's history with phones will repeat it's self and they sell more of each offered than any other phone sells. The 3GS outsold all Android phones combined on AT&T since it was re-released at the cheaper price over a year after it's initial release and well after the iPhone 4 was released. Seems to have worked out really well for both Apple and AT&T.
        non-biased
        Reply Vote

      • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

        @non-biased it's self -> itself; it's -> its
        dolt
        &acirc;€‹
        Reply Vote

  • RE: Apple's iPhone 4S is swell, but pricing is the real killer app

    iPhone 4S is already listed on Apples UK store as starting at ??499 ($768) Whats that all about??
    So much for killer pricing!
    jk_welsh
    Reply Vote
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