Apple Plans Cheaper Nano-Based iPhone

bigkahunafish writes "It seems Apple is planning a cheaper version of the iPhone possibly based on the iPod Nano. This phone would be priced below $300 making it more affordable than the $500-600 iPhone. This should bring Apple phone technology into the hands of more users, though this cheaper phone could have more limited functionality. From the article: 'Sales of the [original] iPhone are expected to be limited to a small percentage of the market due to its high price tag, particularly in the United States where 85 percent of consumers tend to spend $100 or less on cell phones. But analysts forecast that a cheaper phone from Apple, which leads the digital music player market, could pose a much bigger threat to long-established phone makers such as Nokia, Motorola Inc, Samsung Electronics Co Ltd and Sony Ericsson, owned by Sony Corp and Ericsson.' I just hope they don't make a phone based on the iPod Shuffle."

How more limited can you get?

I've been following the reviews for the iPhone. Once you get past the "GeeWhiz" features and dig into the reasons why you'd want a SmartPhone, there's lots of holes to find. Brian Lam [gizmodo.com] discussed this in a pretty level-headed way:

The real elephant in the room is the fact that I just spent $600 on my friggin' iPhone and it can't do some crucial functions that even $50 handsets can. I'm talking about MMS. Video recording. Custom ringtones. Mass storage. Fully functioning Bluetooth with stereo audio streaming. Voice dialing when you're using a car kit. Sending contact info to other people. Instant friggin' messenging. Sending an SMS to more than one recipient at a time.

I expect Apple to fill those holes pretty quickly. But, it's going to take V2 HW to fix some things I'd want like external storage and bigger internal storage.

Re:How more limited can you get?

Yes. And the iPod still doesn't have an FM receiver or voice recording.

And yet it still dominates the market.

Someday the tech pundits will learn that ease of use trumps features.

Re:How more limited can you get?

Off-the-shelf interoperability with your firm's servers AND push mail? Hmmmm.... could that be because your firm has a Blackberry server?

I'm sorry, but I'm not impressed with "off-the-shelf" interoperability with expensive server software from the same company. Give me plain old IMAP and POP3 support, which will give you off-the-shelf support with pretty much every e-mail server on the planet.

Nano Based?

"Nano-based" is pretty much the dumbest way you could've put it. It's going to be based on the current iPhone, but it'll just be a cheaper, physically smaller, and more feature limited device; similar to the way an iPod nano compares to a full size iPod.

Ooooh, I see, Apple has filed phone related patents that utilize a scroll wheel, just like the iPod nano. Never mind that every other iPod(minus the shuffle) also has a scroll wheel.

Any

changing the normal pricing model

This is how Apple is going to change the pricing model used in the cell phone market. Before, when you drooled over a new phone, you knew that if you waited 1-2 years, you could pick it up for next to nothing. The RAZR, for instance, was about $300 when it came out...one year later, it was $99. I've heard several of my colleagues say that they will get their iPhones in two years when they are $50.

I've explained to these colleagues that there is no way this will happen. Apple's products never become cheaper, they just release new "generations" and keep the price about the same. They fill the gap with less functional products. This method is true for their desktops (Mac Pro, iMac, Mac Mini), notebooks (MacBook Pro, Macbook) and their iPods (iPod, iPod Nano, iPod Shuffle); it only stands to reason that it will be true for iPhones, too.

And since the batteries aren't replacable in the iPhones, after two years, you won't want to get a used one. This locks their customers into the current $500-$600 units forever, as you wouldn't want to buy a used one in 1 1/2 years.

Will this work in the cell phone market? I'm not sure, but I'm certain that there will never be a "free iPhone with 2 year activation" type promotion.

Re:changing the normal pricing model

used iPhone (2009) -- $300
cell service for two years -- $1500
Battery (physical part, typical retail) -- $30
Battery (Apple replacement service cost, minus typical part cost) -- $60

Conclusion: the extra costs of the battery replacement service represent about 3.2% of TCO for someone who wishes to buy a used iPhone. Anyone who decides not to purchase a used iPhone based on the built-in battery is an idiot.

Circular touchpad?

So it's a rotary-dial phone, then?

Slashdot sinks further into uselessness

Stop posting conjecture by "market analysts". No matter how you spin it, this is not news for nerds or stuff that matters. It's someone trying to rally interest in Apple stock.

Really?

"..could pose a much bigger threat to long-established phone makers such as Nokia, Motorola Inc, Samsung Electronics Co Ltd and Sony Ericsson.."

Yes, it will steal some market share from the phone makers, but we should all assume that they aren't idiots. What they all have in common is great income and plenty of money to spend on development. Why would they just watch Apple steal everything from them? It's one thing to conquer the mp3 player market, but significantly harder to conquer the mobile phone market.

I am one hundred percent certain that at least a couple of these companies will bring out very competitive products very soon, possibly this year. I also have no doubt that Apple will continue to develop great products, but I just don't see the same iPod era in the cell phone market like so many people think.

Two pieces connected by a cord?

The distance between the human ear and the human mouth is pretty well fixed... how can they make a one-piece phone much smaller than the iPhone? I just don't see it. Maybe a miniature version of a candlestick phone, with two pieces connected by a cord. Or perhaps a tiny Shuffle-like mouthpiece and a separate, tiny bluetooth earpiece?

And I'm not sure I see how they can make the thing more than incrementally cheaper.

They can't make the screen smaller without turning the iPhone into something like an ordinary cell phone. And then you don't get any of the breakthrough advantages of the iPhone user interface. It would just be a Motorola ROKR with an Apple logo and, possibly, better iPod functionality.

So far, Apple has been consistently good in avoiding the temptation to put the Apple brand on something that Apple fans like me would perceive to be a cheap piece of crap.

The iPod Shuffle is a good case in point. Before it came out, everyone was speculating that it would have a tiny, i.e. unusable screen (like some of the competitive .mp3 players). Instead, in both the older and newer Shuffles, Apple came out with a slick piece of industrial design that looks and feels like a quality product in a new category, not a cheap-and-cheesy version of an existing product, or a slightly-tarted-up version of a score of competitors' products.

I'm darned if I see how they can make a much smaller, cheaper iPhone without falling into that trap.

Re:Two pieces connected by a cord?

You haven't seen bluetooth headsets? Mics no longer need to be anywhere near your mouth for decent pickups these days. The size of a cell phone these days has nothing to do the size of your face and everything to do with the size of the components, display, and interface.

Rumour fatigue

Can we please, please stop with this astroturf? Pundits don't know what's going to happen to the iPhone, you don't know what's going to happen to the iPhone, it's probably likely that Apple don't know what's going to happen to the iPhone beyond a couple of OS fixes. The two things that are interesting about the iPhone are the interface and the fact that it runs OS X. Period. It might get more interesting as it develops but at the moment it's a crippled phone on a crippled network that is probably going to prove to be the biggest tech disappointment of 2007. This time next week it will 'iPhone could add two inches to your manhood' or 'iPhone could enable owner to travel in time and space' at this rate.

Isn't the iPhone already Nano-based?

iPod Nano: 4GB and 8GB models
iPhone: 4GB and 8GB models

Both use flash memory for storage.

From my perspective as a 80GB hard-drive based iPod owner, which iPod exactly is the iPhone based on if it isn't already the Nano?

Why would Apple care about "cannibalizing?"

"Another analyst Gene Munster of Piper Jaffray said he expects Apple to bring out iPods that resemble iPhone, which features such as a touch-sensitive screen, later this year. Such products would help stop iPhone eating into iPod sales. 'We believe the iPhone reveals much of what the iPod will soon be,' Munster said in a note to clients, 'iPods with some of the touchscreen features of the iPhone should lessen the impact of cannibalization.'"

Hold on a minute. In the first place, why would Apple we worried about a $500 or $600 iPhone "eating into iPod sales?"

That sounds like the sort of poisonous big-corporation bozo thinking. People that care more about their division than about either a) the customer, or b) the company as a whole. Like old-time GM, where Buick, Oldsmobile, and Pontiac worried more about each other than about, say, high-quality foreign cars. It's the sort of thinking that leads to artificially holding back new products in order to "milk the cash cow" and extract the last dollar from the older product. To rationalized product lines with exactly seven price points.

That's not the way every company works (remember Digital introducing the MicroVAX II, knowing perfectly well that it wasn't going to "cannibalize" higher-end VAX sales, it was going to vaporize them?) And there's good evidence that it's not the way Apple works. A case in point would be the replacement of the iPod Mini, which was a popular, successful, and well-liked product, with the Nano. There's no evidence at all that Apple was worried about the Nano "cannibalizing" sales of the Mini!

RUMOURS

So, this guy, like in Taiwan, like, told me something like, that some company is making metal cases for Apple and stuff, and this is going to be like, some nano-based iPhone. You know, like it's TRUE!

STOP POSTING RUBBISH RUMOURS!

Oh and by the way, if the iPhone is successful, YES there will be follow-up and other models. Look at the iPod. What's new here?

In the UK, Vodafone....

The Guardian reported that in the UK, Vodafone had baulked at a couple of the demands. These were that a percentage of the revenues generated by the user should come back to Apple, and that there should be restrictions on what content could be accessed.

"Apple is understood to be demanding that its European mobile phone partners hand over a significant proportion of revenues generated by the iPhone and restrict the content that users can access."

So, the really interesting point about the device now becomes apparent. The business model has been so far, that you took service from whoever you wanted, using whatever phone you wanted, and you accessed whatever content you wanted. We are now seeing an attempt to get to a totally different model. To use a phone, you are obliged to sign up to a music download store, whether you are interested in music, or music from that store, or not. Then you are obliged to sign up to one and only one network. Finally, you can't access the content you want unless the phone supplier approves of it. And for all of this, you pay not only for the usage of the network, but you also end up paying a fee to the phone maker for the privilege of undergoing all these restrictions.

Now, people will write back and say, you don't have to buy it. No. And that is not the point at all. The point is not primarily about Apple or the iPhone. The point we should be paying attention to is, what happens and how will it feel, if this becomes the standard business model in the mobile internet and service arena?

I suggest not at all. As little, in fact, as if we were to be controlled in our use of our PCs by Microsoft. Buy only the hardware brands that Redmond tells you are permitted. Access only the sites that Redmond approves of. Load only the software that Redmond permits. Or Cupertino.

We must devoutly hope that this model turns into a huge business flop, not because we like or hate Apple, but because the model in itself is inimical to intellectual freedom. The present one, use what you like to do what you like, is infinitely preferable from the point of view of freedom of information and expression. Just as the present CD/DVD model is infinitely preferable to the iTunes model: buy what you want, by whatever browser or at whatever walkin store you want, pay by whatever credit card you want, take it home and play it on the player of your choice, made by whoever you choose to buy players from. This too will turn out to be about intellectual freedom, when it comes to buying ebooks and enews.

It is related to Apple and its values and strategy, in the sense that this has always been what Apple was about. But the important thing is not to be critical of Apple in itself. It is the model that is wrong. Of course, the company is very wrong too. But long as it stays below 5% of everything, who cares? Its when its model starts to dominate that we should become disturbed and enraged, or when it tries to extend its controlled and restrictive model to areas of intellectual life that are presently free.

Then we need to educate, and to resist.

Re:I'm waiting for the iPhone Shuffle

So... that's kinda like when I'm drunk then?

Re:I'm waiting for the iPhone Shuffle

So... that's kinda like when I'm drunk then?

No, the iPhone Shuffle is no more likely to call your ex-girlfriend than it is to call any other contact.

Re:I'm waiting for the iPhone Shuffle

That could be quite awkward when doing the drunken dial and Grandma picks up the phone...

Re:iPhone Shuffle

At least it will encourage people to clean up their contact list.

Fellow Senator, take a look at my new iPhone Shuffle. Watch me dial someone:

Mom [skip]
Brian Smith[skip]
DC Madam [skip! skip! Where the hell is the delete button?!]

Re:iPhone Shuffle

With voice-dial and bluetooth, an "iPhone shuffle" would actually be pretty nice. I doubt they could get good battery life for a phone in such a small device though. I'd give up a screen for a cell phone that would fit on my keychain.

Re:Buy now...

"Got burned on my MacBook, so I think I'll be waiting."

How exactly did you get burned? It sounds like you bought the product you wanted, at a price you found acceptable, and Apple brought out a new product sometime afterward.

You can wait all you want, and either the product will be incrementally improved or discontinued. There really is only two choices. If you buy the upgraded model, that too will be upgraded at some point. Would you complain that you were burned again?

I buy probably a dozen or more Dells a year. If I wait a year, they will have better graphic cards, more ram and probably a better processor. They don't send me emails telling me that there is going to be a new product coming out in a few months. I buy what I need when I need to. And I know that something better will be coming out soon after I buy it.

Re:Buy now...

How exactly did you get burned?

Perhaps he burned his penis? [theregister.co.uk]

Re:Buy now...Unless

Bi-Directional Synching, .pdf, .xls, & .doc reading and browsing is needed and you don't have to lug the Mac Book around all the time anymore.

Then the iPhone "pays" for itself.

I've had mine for just over a week, and I don't regret the money to get these features in a phone I can read in the bright sunlight.

The article is wild speculation

Read the article. The features they describe are ones we read about here on slashdot (apple design patents). Ones for rotary gestures and such. This does not mean it's an iphone or a nano. I'll note that if you have watched the multi-touch demos from that guy whose famous for them (what's his name?) and who consults for apple, his MENUs are not bars but sectored circles and you call them up with a spiral gesture. Another apple design patent was for senstitive places around the edge of a screen that are flush with the screen. That is to say physical buttons associated with the edge of a screen.

Those kinds of details could help reduce the screen area needed to support a full-featured phone and perhaps get it dow to a nano-sized thing. Too small to be a real internet broswer device but large enough to pan through a contact list.

anyhow those design patents have been out there for a long time. SO some ones discovering them does not make it news or mean there's a new product.

On the other hand apple needs a response to the two sided phone/music players from samsung. those are ipod-nano killers since even though they are larger than a nano, you could argue that the music player is actually smaller as long as you planned to have a cell phone in your pocket anyhow. A nano sized phone would kill that.