Cheap Android smartphones are already starting to make an impact on the rapidly growing Chinese connected population, and with Nokia/Microsoft phones soon to be launched to focus on that region and price point – rumours have resurfaced about the possibility of a cheaper iPhone.
Android may be the most widely used smartphone OS, but iPhones are still the world’s most popular smartphones, and with them comes the whole Apple ecosystem from platform specific apps to DRM-wrapped media files. It is increasingly expensive to move platforms as it means buying all those same apps again, whilst upgrading within the same ecosystem means you get to continue using your previous purchases. Granted, the issue is the same on Android phones or those running Windows Phone 7 – but at least with those operating systems the user has a wide variety of phones and manufacturers to choose from. With Apple you can only buy either the latest model, or the previous model at a discounted rate – that is it, and neither of the options are cheap when compared to competitors from HTC, Samsung, Sony-Ericsson, and more.
Apple already dominates the high-end smartphone market, and for good reason as their smartphones to date have always led the pack. However, competition is increasingly fierce with phones such as the Samsung Galaxy SII snatching marketshare that would have previously have been Apple’s. With Android phones being cheaper options (and Nokia/Microsoft soon to follow) it is likely that they will become dominant both in emerging markets and with younger users – and Apple knows it needs to get people into its ecosystem early in order to lock them in. With their current range of just two phones – both in the more expensive range – Apple does not currently have an entry to these markets. iPhones are still the desired luxury phones that people desire, but that feeling is waning, and Apple will need emerging market penetration sooner rather than later if they don’t want to face being eclipsed in a few years as the Android and Windows Phone ecosystems effectively lock them out.
Reuters is claiming that the entry level iPhone will sport 8GB of memory, and sport a price-tag of less than $200. Such a price would exclude the possibility of just a cut-down iPhone 4, with that currently retailing at about $600 without a contract. Instead, Apple is likely to shrink the size of the phone completely and offer a smaller non-retina display screen, a single lower resolution camera, and a CPU likely to be similar to that currently found in the iPhone 3GS. At under $200, even such a lower spec’ed device would be a bargain, and as long as Apple managed to avoid fragmentation of the App Store (something that plagues Android due to the wealth of different devices), then it would likely sell very well across the globe – buoyed by Apple’s current halo of luxury and design quality. Could this be the iPhone Nano that has been rumoured for the last three years?