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03-01-2011, 09:47 AM #1
Apple Looking at Cheaper iPhones, Prepaid Plans
Even though the supposed iPhone "nano" appears to be just rumor, Apple is apparently still considering bringing cheaper phones to market. Saying they don't want their phones to be "just for the rich," Apple chief operating officer Tim Cook made it clear that Apple is looking to increase its market share by offering lower cost options. He made these comments on a call with an investment analyst, who also noted Cook's remark that Apple is "not ceding any market," and is looking into prepaid plans.
Bernstein analyst Toni Sacconaghi talked to Cook, the man in charge while Steve Jobs is out on medical leave, as well as chief financial officer Peter Oppenheimer and Eddy Cue, the vice president of Internet Services. In a research note shared with his clients this morning, Sacconaghi reports on what he learned from this high-powered trio. Unsurprisingly, he found that the executives "projected a very confident tone," which is pretty much what you do when you're talking to someone your investors are listening to.
Calling it "the mother of all halos," Cook said that the iPhone has increased Apple sales in every product line, especially in new, emerging markets where the company has not previously had a presence. According to Sacconaghi, the COO "appeared to reaffirm the notion that Apple is likely to develop lower priced offerings," though he did not mention any specific news about a cheaper phone. In particular, however, he did report that Apple is studying how to work with pay-as-you-go service, with Cook saying that he is doing "clever things" to enter the prepaid market. The iPhone, he asserted, should be "for everyone," not "just for the rich." He referred to Apple's stepped up efforts to boost sales in China - which, as he noted, is "a classic prepaid market" - as a sign of their interest in becoming more competitive on price.
Chief financial officer Peter Oppenheimer, for his part, said that Apple is trying hard to increase the number of carriers it's working with. He noted that the iPhone is available on only 175 carriers today, as compared to Research In Motion, which has BlackBerry phones with 550 carriers worldwide. However, Oppenheimer said, Apple would not let carriers dictate terms, which Sacconaghi interprets as meaning that "Apple might be willing to act to disintermediate carriers with a soft-SIM."
Cook is apparently convinced that the future belongs to tablets, saying that the tablet market will eventually be much bigger than the PC market. Sacconaghi estimates that if Cook is right, that could mean anywhere from $60 billion to $100 billion in income for Apple alone. Sacconaghi also claims that Cook feels the iPhone is "just below food and water on Maslow's hierarchy of needs", putting it ahead of other needs like safety and love. The analyst did not provide a direct quote for this rather outlandish claim, though.
03-01-2011, 10:03 AM #2
If they would offer the iPhone to all carriers in the US then that would increase their market share. Also if they don't want their phones to be "just for the rich" then they should put them on other carriers that offer cheaper plans other than just AT&T and Verizon.
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03-01-2011, 10:08 AM #3
Idk flood the market with cheap iPhones for the masses maybe but I'm going with the higher end model.
03-01-2011, 10:30 AM #4
That's a big *** phone!
03-01-2011, 10:34 AM #5
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03-01-2011, 10:35 AM #6
Apple needs to pull METRO PCS OR BOOSTMOBILE move and they will see their money blow out like crazy nd ppl be leaving At&t nd VZ. That's if they were to offer phone plans and have actual Apple network with good coverage and reception. But again am just dreaming. Ahah
03-01-2011, 10:38 AM #7
If they offer a cheaper phone, it will be interesting to see the difference between the top and low end model.
Maybe one's plastic and the other gold If I pay top dollar/pound for my phone, I would expect to get a high end spec (hence it would be very interesting to see what they would leave out), if anything.
Also, does anyone know if tomorrows conference, will mention anything of the iphone or just the ipad
03-01-2011, 10:46 AM #8
I realize they should increase market share and they have stated they want everyone to get their hands on an iPhone but, it just doesn't seem apple-ish. Apple has expensive, high class products. I mean come on, its like seeing THE IPHONE on a walmart shelf in plastic. The best phone being among the cheapies........ NO!
03-01-2011, 11:20 AM #9
Just put a radio in an iPod Touch. Problem solved. That would basically be a smaller camera, less ram, less storage, no expensive glass back panel, no IPS display (but still Retina-level ppi, like the Touch).
That would shave a few hundred dollars off right there! I think the iPod Touch is a superior product for your money compared to the ridiculously overpriced iPhone. There's no reason for an iPhone to be $700 - that's ridiculous. I've bought a quality PC with a camera, blu-ray, and all the bells and whistles of a modern day computer for $600 (including a physical keyboard!).
Make those changes I just noted, sell it for FREE (on contract), and you've just sold billions more phones.
03-01-2011, 11:27 AM #10
They're never going to release a second cheaper version of any iPhone. Apple would never bastardize their own handset by stripping features. But the service and the cost of a phone without a contract are the two things that keep most people from getting one, and in some cases, bad credit. The pay as you go option is a great idea and also a much more likely one, provided that the phones don't cost $800 that way.
03-01-2011, 12:02 PM #11
They can still make a quality product without making it the most expensive. The Touch is a great example. It's solid, it feels nicer in the hand, and it's just as powerful as the iPhone (it can power through all the biggest apps just as easily).
Why do people think that Apple will 'never' do something? Jobs himself even said that they wouldn't make a tablet, yet here we are. It would be infinitely smart of them to exploit a market that they're not benefiting from: in this case, the mid-range phone market.
Maybe it's just an Apple Fanboy thing -- maybe they equate cost with value? Apple can still make a valuable device that hits another (smarter) price point. They've been doing it with the iPod line for years.
Now that I think about it some more, I think the only reason Apple hasn't made another iPhone at this point is because they're throwing absolutely everything into the iPhone that they can, and they don't have enough factories to reach demand. There has to be certain conditions before we'll see a $mart iPhone. What those exact conditions are, and when they'll be met, I couldn't say. I just don't think they're big enough to saturate the market yet. They've only been making cell phones for a few years, and it takes a year to make a factory/ expand. Right now it seems that Apple is in the expansion phase, so they're not focused on releasing variations of the iPhone - yet.
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Gustavo Saliola (03-01-2011)
03-01-2011, 12:12 PM #12
If they made it so everyone could afford one, even if they weren't making a killing on iPhone sales they would still be raking it in from iTunes and app store sales perpetually. I don't doubt that everyone and their dog would own one if they had a cheaper cost to operate
03-01-2011, 12:47 PM #13
I'm not rich but I have an iPhone...
I'd call it fortunate
03-01-2011, 01:21 PM #14
03-01-2011, 02:09 PM #15
I once prayed to God for an iPhone, but quickly found out He didn't work that way...so I stole an iPhone and prayed for His forgiveness.
A dog is the only thing on earth that loves you more than you love yourself. - Josh Billings
03-01-2011, 02:43 PM #16
Yah...this is a great idea.
It fits right along with the throw away mentality that everyone has now!
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03-01-2011, 04:02 PM #17
iPhone 5 prepaid phone version.
BEST PHONE IN THE WORLD
I will be too happy
03-01-2011, 06:39 PM #18
You can get an iPhone for $49 right now with AT&T
03-01-2011, 07:03 PM #19
03-01-2011, 08:02 PM #20
Dont screw thing up over greed. Thats all im askingCommon Sense Its Not So Common