Comments on Mac Predictions: All-black iPhone?

I think you make a good argument in favour cheaper...

2009-02-23T10:17:00.000Z

I think you make a good argument in favour cheaper iPhone contract options, and I agree in general that Apple needs to make the iPhone more affordable in order to achieve market leadership.

I think Apple will be reticent about letting go of unlimited data in their plans, however, since they see this as an integral part of the iPhone proposition. They may instead choose to accept a smaller subsidy from the operator in exchange for a more affordable contract.

In terms of dividing the iPhone line into a 3G and non-3G phone, I think this is unlikely for two reasons. Firstly, Apple wants to maintain a cohesive environment, to keep R&D costs down, and to promote the platform to third party developers. Secondly, the absence of 3G from their previous model was a serious obstacle to adoption - especially in Europe, where the technology is ubiquitous. Introducing another 2G-free model would be a step back.

If Apple did decide to introduce a more affordable contract option, alongside the all-you-can-eat data plan, I don't see why this needs to be accompanied by a different hardware product. Creating a grey area between the iPhone and iPod Touch lines would cause confusion. It may be a better option to offer a fully-functional iPhone with a cheaper contract option.

The reason Apple should introduce an iPod Touch Ph...

2009-02-22T23:41:00.000Z

The reason Apple should introduce an iPod Touch Phone is that there are two separate markets for Apple to address:

1 - Those who want and can pay for a phone that comes with a mandatory, expensive monthly plan. That's me, for example. But it's not my wife and children.
2 - Those who might or might not want such a phone, but CANNOT or WILL NOT pay the high cost of that monthly plan.

So, what am I recommending? An iPod Touch Phone!
It has all the functionality of a full iPod Touch but with a phone which is limited by having a limited, cheaper plan.

My wife and kids are on a family plan with Alltel that includes a very little bit of internet and unlimited texts. For 4 people the total monthly cost is about $150. Whereas, adding four iPhones would be double that cost, which I cannot afford.

So now, they all carry an iPod and an Alltel phone. When they could carry an iPod Touch Phone. It would do everything the Touch already does, including surfing the internet and getting email WHEN they have WiFi. But they could also make phone calls and text as they currently do.

What would Apple get out of this arrangement? They would sell a Touch about get a $200 per device subsidy from the carrier.

Is it a bad trade-off for Apple, since they currently get a much higher subsidy for the iPhone? NO!!

As I explained at the beginning of my post, this is about addressing two different markets. People will still buy iPhones if they want 24/7 internet and can afford the monthly plan. Those who cannot afford the unlimited plan or perhaps don't want it, will buy a Touch because it has a phone and so Apple will sell a Touch and also get $200 from the carrier. Perhaps it costs an extra $50 in costs for Apple to add a phone to a Touch. That makes the return on said investment 300% (or, a 75% margin).

And the Touch Phone only cannibalizes there iPhone if you believe that there are no buyers out there who cannot afford or don't want an unlimited plan. If you believe that there are such buyers, then these are incremental sale.

I think the suggestion is for an iPhone with WiFi ...

2009-02-22T16:44:00.000Z

I think the suggestion is for an iPhone with WiFi and GSM, no Edge or 3G. An iPhone that needs WiFi to do any data transmission but can make calls anywhere in standard cell phone coverage.

Seems like it might be useful, but I'm not sure Apple will make a whole new product to fit that niche.

Hi. Do you mean that the iPhone should have Wifi? ...

2009-02-22T10:13:00.000Z

Hi. Do you mean that the iPhone should have Wifi? It already has that. Sorry if I'm misunderstanding...

I still think they should come out with a phone fo...

2009-02-21T23:38:00.000Z

I still think they should come out with a phone for those who don't need to use cell signal for email and internet, so that the monthly plan cost would be the same as for their current non-smartphone.

Do you know what that would be?

It would be an iPod Touch phone. I know that sounds stupid, but think of it: all the capabilities of the Touch, with a phone built in. So when you're in wi-fi areas you can surf the net and get your mail, and when not in wi-fi land, it's an iPod with a phone. And the monthly plan costs are minimal. Apple would still get about a $200 subsidy and they would sell a hundred million a year I would wager.

Hi Scott. I think that Apple is likely to deliver ...

2009-02-21T15:05:00.000Z

Hi Scott. I think that Apple is likely to deliver a price-drop soon, and a further price drop with the release of the new model in June (or earlier). iPhone is now well positioned to become the market leader, but Apple will need to be aggressive on pricing in order to achieve this.

I think all this means that they're unlikely to split the product lineup - I think they'll come out with a single successor model to the current iPhone 3G. It will be cheaper, and offer more storage. They'll improve the camera as well, to support video, higher resolution, focus, face detection, etc.

They'll also need to introduce iPhone 3.0 firmware with the new phone, to plug the remaining gaps, to inoculate themselves from the coming Palm Pre/Andoid/Windows Mobile onslaught. Finally, we may have copy and paste, and To-Dos!

Graham,
Last October or November I posited here...

2009-02-21T14:43:00.000Z

Graham,
Last October or November I posited here that Apple would be releasing a "pro" version of the phone with a 4.5 inch screen with more power and also a phone without the high cost unlimited data plan, which is the real cost bottleneck. Of course nothing has happened yet, and it's becoming clear that Apple must be planning to stick to a June-ish timeframe for new phones. Any thoughts?
Scott