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Size matters. Apple has confirmed this lesson several times already - iPod mini, Mac mini, iPad mini... Currently, Apple has a whole family of "mini" products. That magic word is a kind of symbol of compactness and mobility. But how much more compact and portable should the device be, which in these features belongs to the top of the food chain? The iPhone is actually one of the smallest hi-end phones on the market. Now, analysts and journalists with elusive "sources close to Apple" have come up with a claim about the iPhone mini.

Render iPhone mini by designer Martin Hajek

The first mentions of a smaller iPhone appeared back in 2009, then under the name "iPhone nano". At the time, the iPhone had one of the largest screen sizes on the market. It only took 2,5 years to get to the opposite end of the imaginary ladder, but there's still nothing wrong with that. Back then, the theory about a nano phone didn't make much sense, a 3,5″ display was a kind of ideal. Today, however, we have the 4″ iPhone 5 on the market, so we have room to downsize. So would Apple really have a reason to introduce a cheaper phone alongside the latest hi-end generation? There are actually several reasons.

Recycling

Every company likes to recycle its products, and even Apple is not afraid of it. As for the phones, in addition to the latest generation, the two previous generations are still available at a reduced price on the Apple Online Store. The iPad mini itself is a great example of recycling, as it took, for example, the chipset and operating memory and quite possibly a few other components from the revision of the iPad 2. It is always cheaper to use previously produced components than to outsource the production of new ones. For that reason, the iPhone has always inherited the processor of the previous iPad.

[do action=”citation”]Every company likes to recycle its products and even Apple is not afraid of it.[/do]

If the iPhone mini were to be a cheaper variant, it would certainly not share the same processor with the new generation phone. Apple would likely reach for previously manufactured components. Here, the Apple A5, which powers the iPhone 4S, makes a great offer. There would be an obvious parallel with the iPad mini, where the smaller version has a two-generation older processor, although it is a completely new product, the biggest attraction of which is its compact size and low price.

Market expansion and affordability

Basically, the only main reason for introducing the iPhone mini is to gain more market share and win over those customers who wouldn't buy an iPhone in the first place due to the high price. Android controls over 75 percent of the mobile phone market worldwide, a trend that Apple would certainly like to reverse. In particular, poorer countries with large populations, namely India or China, would have great potential for such a device, which would make customers there choose an Apple phone over a cheap Android device.

Although Phil Shiller said that the company is not going to venture into a cheap phone, that doesn't mean that they can't make a cheaper phone. It costs Apple about $16 in parts and assembly to make one 5GB iPhone 207 (according to September 2012 iSuppli analysis), Apple then sells it for $649, so it has a gross margin of $442 on one phone, i.e. 213 percent. Let's say that one iPhone mini would cost $150 to make, which is $38 less than it costs to make an iPhone 4S due to component recycling. Apple could sell such a phone for $449, or even better, $429 without the subsidy. In the first case, the margin would be 199 percent, in the second, 186 percent. If the iPhone mini actually cost $429, the percentage drop in price would be the same as the iPad mini versus the last generation iPad.

The smell of novelty

The tinsel of the new product also plays a very important role. It can be argued against the iPhone mini that Apple sells older models at a reduced price (in the case of the 16 GB iPhone 4S by $100), however, the customer knows very well that this is at least a year old model, and not at a significantly lower price. The iPhone mini would have the same new look as the iPad mini, and there would logically be more interest in it.

Of course, it would have to be a little more than just a renamed iPhone 4S. Such a phone would likely share a similar design to the current generation. However, perhaps with small variations that we can observe in the difference between iPad and iPad mini. After all, the Telefo was a bit different from the high-end version. The fundamental difference would be mainly in the diagonal of the screen, where Apple would return to the original 3,5 inches and standardize this size as "mini". This would maintain compatibility with applications and avoid any further resolution fragmentation. Compared to the 4S, there would probably be a few other minor improvements, such as a new lightning connector, but that would be the end of the list.

Finally

The iPhone mini would thus be a really great marketing move for Apple, which could greatly help it in the phone market, where despite increasing sales, it is still losing its once almost dominant share. Although Apple is certainly the most profitable of all phone manufacturers, a broader expansion of the platform would mean a benefit to the entire ecosystem that Apple has been consistently building for years.

At the same time, he would not have to undercut the price as much as other producers and would still maintain high margins, i.e. the wolf would eat himself and the goat (or sheep?) would remain whole. A smaller iPhone definitely makes more sense this year than it did in 2009. Apple would not complicate its portfolio in any way, the iPhone mini would simply replace one of the older models still offered. The analogy with the iPad is more than obvious here, and although it would not be the kind of revolution that we would like from Apple, it would be a relatively logical step for the company, which would make an exclusive phone available to the less wealthy and thus suspend the growing world dominance of Android, which is undoubtedly a good motivation.

Sources: Martinhajek.com, iDownloadblog.com
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