Michal Ždanský A cheap version of the iPhone is the speculative hit of this year. On the one hand, it is said that Apple does not need such a phone, while others call that it is the company's only chance not to completely lose its share of the global mobile market. Apple has managed to surprise several times and released products that many (including me) said would never see the light of day - iPad mini, 4" iPhone. Therefore, I do not dare to say whether the budget iPhone is a clear step forward or a completely misguided idea.
You can speculate on the budget iPhone in different ways. Already I thought before over what such a phone, workingly called the "iPhone mini," might look like. I would like to follow up on this consideration and focus in more detail on the meaning of such a phone for Apple.
Entrance gate
The iPhone is the main entry product into the world of Apple, Tim Cook said last week. This information is far from new, probably many of you got your Mac or iPad in a similar way. A similar mover used to be the iPod, but the era of music players is slowly coming to an end, and the company's phone has taken over the reins.
[do action=”citation”]There should be an ideal balance of price versus function between phones.[/do]
Since the more iPhones sold, there is a greater chance of "conversion" of users, it would be logical for Apple to try to get the phone to as many people as possible. Not that the iPhone was not successful, on the contrary. The iPhone 5 is the fastest-selling phone of all time, with over five million people buying it in its first weekend of sales.
It is often the high purchase price that makes many people opt for a cheaper Android phone, even though they would prefer an Apple device. I don't really expect Apple to lower the price of its flagship, and the carrier subsidies are also rather ridiculous, at least here. The introduction of a cheaper version of the iPhone would partially affect the sales of the more expensive version. There should be an ideal balance between phones price versus features. A cheaper iPhone would certainly not have the same powerful processor or a comparable camera against the current generation. The user should have a clear choice. Either I spend more money and buy the best phone possible, or I save up and get an upper mid-range phone with worse features.
Apple does not need to chase market share, because it owns the majority of the profits. However, more iPhones sold can translate into, for example, more Macs sold, on which it also has high margins. A budget iPhone would have to be a well-thought-out long-term plan to draw users into the entire Apple ecosystem, not just to gain more market share.
Two parallels
As for the cheap variant of the iPhone, a parallel is offered with the iPad mini. When Apple introduced the first iPad, it quickly gained an almost monopoly position in the market, and it still holds the majority today. Other manufacturers could not compete with the iPad on the same terms, they did not have a sophisticated network of suppliers, thanks to which production costs would fall and they could reach interesting margins if they offered tablets at comparable prices.
Only Amazon broke the barrier, offering the Kindle Fire – a seven-inch tablet at a significantly lower price, albeit with very limited functions and an offer focused exclusively on Amazon content and its own application store. The company made practically nothing on the tablet, only the content that users buy thanks to it brings them money. However, this business model is very specific and not applicable for most companies.
Google tried something similar with the Nexus 7 tablet, which the company sold at about the factory price, and its task was to get as many people as possible into the Google ecosystem while boosting tablet sales. But a few months after that, Apple introduced the iPad mini, and similar efforts were largely shut down by the tip. For comparison, while the 16GB iPad 2 cost $499, the Nexus 7 with the same capacity cost half that. But now the base iPad mini costs $329, which is just $80 more. And while the price difference is slight, the difference in build quality and app ecosystem is vast.
[do action=”quote”]The budget phone would be a 'mini' version of the flagship.[/do]
At the same time, Apple covered the need for a tablet with smaller dimensions and weight, which is more convenient and mobile for many. However, with the mini version, Apple didn't just offer smaller dimensions at a lower price. The customer clearly has a choice here - either he can buy a powerful 4th generation iPad with a Retina display, but for a higher price, or a more compact iPad mini with older hardware, a worse camera, but for a significantly lower price.
And if you're looking for another example of Apple offering a product with an obviously cheaper build (I mention this given the speculation about the plastic back of the budget iPhone) with a lower price point that served as a gateway to the world of Apple, just think of the white MacBook. For a long time, it existed side by side with aluminum MacBook Pros. It was especially popular with students, as it "only" cost $999. True, the white MacBooks rang a bell, as its role is now occupied by the 11″ MacBook Air, which currently costs the same money.
Why iPhone mini?
If there really is a place for a budget iPhone, the ideal name would be the iPhone mini. First of all, I believe that this phone would not have a 4" display like the iPhone 5, but the original diagonal, i.e. 3,5". This would make the budget phone a 'mini' version of the flagship.
Then there is the parallel with other "mini" Apple products. Such a Mac mini is the entry computer into the world of OS X. It is the smallest and also the most affordable Mac in the range. It also has its limitations. It's nowhere near as powerful as Apple's other Macs, but it'll get the job done for less demanding users. Another product already mentioned is the iPad mini.
Finally, there is the last of Apple's product categories, the iPod. In 2004, the iPod mini was introduced, which was a smaller and cheaper offshoot of the classic iPod with a smaller capacity. True, a year later it was replaced by the nano model, moreover, the iPod shuffle presented at the beginning of 2005 spoils the theory a bit, but at least for a while there was a mini version, both in size and name.
Summary
"iPhone mini" or "budget iPhone" is definitely not a reprehensible idea. It would help get iOS into the hands of more customers, drawing them into the Apple ecosystem that few want to get out of (just a guess). However, he would have to do it smartly so as not to needlessly cannibalize the sales of the more expensive iPhone. Sure, there would definitely be some cannibalization, but with a cheaper phone, Apple would have to target customers who wouldn't buy an iPhone at the regular price.
[do action=”citation”]Apple usually does not make hasty decisions. He does what he thinks is right.[/do]
The fact is that Apple basically already offers a cheaper phone, i.e. in the form of older models at a lower price. With the iPhone mini, the offer of a two-generation older device would probably disappear and be replaced by a new, cheaper model, while Apple would "recycle" the phone's guts in a mini version.
It is difficult to predict whether Apple will take this step. But one thing is certain - he will only do it if he feels that this step is the best he can do. Apple doesn't usually make hasty decisions. He does what he thinks is right. And this assessment awaits the iPhone mini as well, although it has probably already taken place a long time ago.
Great article(s)
the problem for me is the colors.. as long as they are only test pieces and the colors will have shades like the one in the first picture, I can imagine it :)
I think on the contrary like a business phone. e.g. I distributed IP4 on all construction sites (two houses) so that everything would be documented and it would be online somewhere else. unlike the droid and wifi in the sd card, the iphone simply works, because the iphone camera, for example, with the old display from the 3GS, a good 5mp camera would work. in addition, thanks to the increasingly complex jb, apple could degrade the phone's software.
Nice article, although I don't have much faith in the cheaper iPhone. I like the line that "Apple doesn't make hasty decisions".
I will only add a detail that if such a cheaper or new full-fledged iPhone will be presented in September, it is already manufactured, manuals are ready for it in all languages, flyers, boxes are ready, an advertising video is being cut, and in the course of a few days it will be loaded with new iOS, packed in boxes, then on pallets and stored so that in September they can sell 5 million units AGAIN in a single weekend :-)
So that is more or less contained in the last sentence of the article.
It is, of course, but few people can imagine what it all means and how difficult (almost unrealistic) it is to arrange and keep it secret :-)
Even about the iPhone 2g (first generation), no one outside Apple knew anything, so why should it be any different now??? :)
Good article, but I don't think Apple will release anything like this and I sure hope so. As stated in the article, operator subsidies are not large, at least not in our country. In other countries, you can get it for free or for a maximum of 99 euros (pounds) for a flat rate of 40 euros, for example. Which almost everyone can afford. These prices are in the main countries and I doubt that Apple would make a special iPhone for countries like the Czech Republic, where the operator is a thief and does not subsidize phones.
If I may add my handful to the mill - I started on an iPad 2. An incredible device at a great price. And after a few months, I started to have cravings for an iPhone, but that's a bit more expensive device after all, so I bought an iPhone 3GS and a cover at a bargain. Sometime in April 2012, when the next two generations were already sold. And it worked great even for that, so the decision was made: 4S. (Note: I passed on the 3GS and it still runs great) followed by an iPad Mini and an iMac, and in January a Macbook. And it's all thanks to the iPad, because the iPhone is more expensive as an entry-level device and doesn't offer as much if you also have an iPad.
And for the iPad Mini: I use the iPad 90% in Portrait, i.e. portrait. And I used the iPad 2 as well, but holding it in one hand – it hurt terribly, even when I held it in two. Until a few days I just almost couldn't use it because it was really painful. The iPad Mini has appeared. Light, smaller. I had to go into it immediately. And not because of the price.
I think Apple made a big mistake with the iPad Mini. Not by the way he presented it, but how he sells it and what he put into it. People who want a cheap tablet won't buy an iPad Mini anyway. It will be bought by people who switch from, for example, a large iPad and want portability. I understand the absence of Retina in the first generation, but I don't understand at all why the Mini should be less powerful, more precisely 512MB RAM and an A5 processor. That's just not enough these days. In terms of performance, it is already a little outdated, waiting for applications to start is often there. And there are not many of them in the RAM. And I don't understand the pricing at all. Apple has CONSCIOUSLY reduced their margins. If only they had the same % margin on the Minim as on the large one. I personally would like a Mini with hardware like a large iPad. Maybe for the same price. I don't regret the purchase, but it's a shame that they prioritized people who might buy an iPad because of the price over those who would pay a lot for it because of everything around it. And don't tell me that a person who buys a tablet because of the price will spend as much in the store as a person who doesn't care so much about the price.
You can run almost all games on the iPad mini... My friend plays Real Racing 3 on it and it's fine, he has over 50 games on it and the device runs as it should... So it's probably not a weak processor :)
Nowhere did I talk about not running everything on the device. Yes, absolutely no problem, but I didn't say that the A5 with 512mb ram is not enough for one application, but not enough for multiple open applications. Startup speed, etc. It's incredible to see it in iWork.
Nicely written. But I don't think the iPhone should be an entry level product. For many, it was the iPad, on the contrary. To this day, the iPhone hasn't convinced me why I should buy it at that price. Probably just because I don't need to do anything on such a small device. Of course, until the arrival of the iPad, I took it with all ten, but now? Internet, GPS, photo, video are handy in a mobile phone. It's enough for normal phone functions, and for others it's a tablet. In the future, the mobile phone could function as a motion controller or projector (not the pseudo ones of today). But the competition also has all this, and it basically works well this way.
Personally, I am against the cheaper version of the iPhone, which would replace the iPhone 4 and iPhone 4s, I don't have anything, the connectors and display sizes would be unified. But what is not completely clear to me is that the business model looks late, because:
- the situation in the USA after the release of the cheap version and the new top model: iPhone Budget - $0, iPhone 5 $99, new top iPhone $199 with contract.
But what will happen next year when Apple releases a new version of the cheap iPhone and the top iPhone?
Will I also sell old models? If so, there will already be 5 different versions/generations of iPhones on the market...
I'm not sure Apple wants to go that route. If he wants to keep only 3 different generations on sale, as is the case today, the old-new generation will have a much shorter life cycle and the average margin will not be as high as before.
I think that it would bring a lot of advantages for Apple that were not mentioned in the article, e.g. it would have a cheaper model even in the American market, where it lost the distribution of the four, which is no longer allowed to be imported into the USA, and let's face it, the USA is not just a small market. :)
in which case it would be given for $1.
With all due respect to the active contributors of the apple tree. This article is about nothing. If Mr. Michal Žďánský had a little knowledge of the iPhone situation in the world, he would know that in the USA more than 90% of people can afford an iPhone, even if they have a subscription to an operator. So there's no sense of a "budget iPhone" with the iPad mini, and with Macama it's a slightly different matter. Have a nice day.
Hello George. Maybe you and Michal didn't quite understand each other. After all, he does not claim that it will be so, he only offers his opinion on this topic. The article is a response to speculation about a cheap iPhone. And the author himself is somewhat skeptical of this idea.
90% can afford an iPhone? That's quite an interesting statement when there is more than 20% unemployment in the US (ShadowStats, June 2013). You certainly have something to back it up, I'd be happy to read any sources. And do you also know that you need to have a plan of at least 60-80 dollars to get the price?
You can get an iPhone 4 for 99 cents with a plan starting at $40. For seniors from $30. If you then look at other phones, you will find that you can buy them under practically the same conditions, i.e. a phone for free or for a dollar with an equally expensive package of services.
You must not start from the situation in this bananaistan. After all, it took 10 years here for the operators to stop defacto robbing their customers. So you might find someone who offers decent conditions for the purchase of phones, incl. iPhone.
Otherwise, I agree, 90% of people in the US are very exaggerated. But the more than 50% who buy it is also not negligible and it rather means that the price is quite competitive. Unfortunately only in some markets.
Finally someone who put it a bit straight, yes I overshot with 90%, it was meant with exaggeration. Otherwise, the sources for me are people who live or have lived in the USA and also interviews with Genius members.
with all due respect to you, if there is anything about anything, it's your comment, not this article. The purchasing power of the US population is, I must admit, a big unknown for me, but the opinion that 90% of the population there can afford it seems very laughable to me. Apple certainly doesn't sell the iPhone only in the US, so even if 90% of the US population could afford it, it will probably barely be enough for global production...
A cheaper variant of the iPhone is a necessity for Apple, not a possible idea that will decide whether to implement it or not. If we want to talk about a cheaper version of the iPhone, we need to first think about the iPhone as such. first, the iPhone is expensive, and second, and this applies to all manufacturers, not just Apple, it doesn't have much new to offer anymore. One simple result emerges from this, those who have to buy an iPhone, probably already have one, and since the new models basically do not come with anything new, these customers will exchange their iPhones for new models very sporadically. The other part can't afford an iPhone. And for these two reasons, it is absolutely clear that the demand and thus the sales numbers must naturally decrease. I digress a bit, I would easily transform the opinion that the iPhone is the gateway to the world of Apple to the opinion: "The iPhone is the only thing we make money on and what we sell en masse and what makes us what we are, if the iPhone stops selling to us, we can start slowly pack..." + iPad and that's why we started making iPad mini...
So Apple cannot afford falling demand and falling sales figures at any cost…. And the only way to prevent this is to go somewhere middle-class with the iPhone and reach another mass of customers. We do not have to go far and look at the well-known Samsung, the flagship SGS4 in four different modifications is a clear defense against the weak demand for the highest model with the highest price, which did not bring anything new about the previous model, so it is not very popular for understandable reasons interest.
If the iPhone Mini really happens, I wonder what the differentiation strategy will be. The iPad Mini is quite different from the iPad, but why sell a cheaper iPhone Mini with 3.5 inches and better internals when you can still buy a 4S with better hardware?
I'm curious :-) In any case, a nice, fact-based article. But eventually, maybe not this year, Apple will release a cheaper iPhone. He always did this with successful products.
iPhone LITE when already the guts will be from iP5 ie 2x 1,2ghz and 1gb ram... it will lose some functions.
At the moment, Apple does not have any other device that could be given to a child, while relying on the fact that it has a closed ecosystem and would basically like the whole family to use one platform. In my opinion, there is clearly a lack of a cheaper, more durable model in colored plastic that would be great for both children and developing markets.
If Apple decides to go in this direction, it will certainly attract a lot of customers (including my entire family). Apple will no longer be such an exclusive brand.