Analyst maintains call for single, modest new iPhone
updated 04:00 pm EDT, Wed September 21, 2011
View conflicts with some reports
Apple is only working on one new iPhone model, and a fairly incremental one, argues Wedge Partners analyst Brian Blair. "We expect the focus of the new iPhone will be iOS 5, a speedier A5 processor and a higher resolution 8 MP camera with a small possibility of a larger 4 inch screen," he writes in a new memo. "We believe the casing will be largely similar to the iPhone with some particular modifications to the antennae. We don’t expect a second, dramatically different iPhone to accompany this as we don’t think Apple needs to have 3 models in the market to address the high end, mid-tier and low end since the iPhone 4 (with memory lowered to 8 GB) will drop to $99 and effectively attack those markets."
Blair's view differs from reports indicating the iPhone 5 will use a substantially different shape, including a metal back with tapered edges similar to the ones used for the iPad 2 and the fourth-generation iPod touch. Still other accounts have hinted at the prospect of an additional mid-tier iPhone, using better hardware than the iPhone 4, but without costing as much as a new iPhone traditionally has. A few have claimed Apple interest in the prepaid market, which has so far been an Apple blindspot in terms of global sales.
"Why would Apple bump up only the processor specs of the iPhone 4 in addition to a newly designed iPhone 5 if the goal is to sell it into the pre-paid market at a lower cost?" Blair contends. "A[n iPhone] 4S would simply cost more and a 4S itself wouldn’t create a mid-tier market unless it was priced at $99 and the iPhone 4 went to $49 with the new iPhone at $199. We see this scenario as unlikely," he concludes.
Unusually, he does support the idea of a 3G-ready iPod touch, although relatively little evidence has emerged to support it. Blair echoes the idea that a new Touch will use subscription plans similar to the 3G iPad, in which data is paid for month-by-month. Some observers have speculated that the new iPod may be getting mistaken for an iPhone 4S, or vice versa.
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Price points wrong.
The analyst obviously does not know the market that they are analyzing, which means his work is suspect. I don't know whether Apple will create a low(er) cost iPhone or not, but this analyst has price points of $199, $99, $49 - that is the post-paid market with a subsidized iPhone. The rumours pertain to a lower cost iPhone for those countries where the pre-paid market is the primary market for mobile phones (China, and in my case Thailand). For example an iPhone for the pre-pay market is NOT subsidized so the iPhone 4 costs around 23,000 baht = between $700 and $750 USD. This leaves a lot of students buying the Blackberry lower cost models for around $8,000 baht = $270ish USD. This is the market that Apple has not tapped, and could be potentially served by a phone that sells for around half the cost of the iPhone 4.