On November 26, analyst Gene Munster hypothesised that in the next two years, Apple could build a cheaper version of its iPhone handset. He predicted that a cheaper iPhone would be aimed at developing markets such as China and India. Western phone markets revolve around the model of subsidising costs for high-end smartphones and recovering those subsidies through more expensive plans. It looks like that sort of model doesn’t really cut it in the east,and so it may well be true that there is need for a cheaper iPhone. But will it ever happen?
I could end the article there, but I’ll take some time to examine the prospect nonetheless, and hopefully convince you likewise.
Ever since its release, the iPhone has been a thing of beauty, a premium device of fine build quality, and finer specification. Apple prides itself on the premium quality, design and user experience that continue to draw new and repeat customers to their devices. The evidence of this? The undeniable success of Apple’s individual products and the corporation as a whole. As many of you as Apple customers know, this premium experience comes at a pretty significant price.
The extensive design and development put into the iPhone’s hardware and software is reflected in the price. The notion of a “cheaper” iPhone just doesn’t really fit into the Apple way of doing things… A “cheap” iPhone would be exactly that. Cheap. It’s not like Apple to dilute their product line up to incorporate the needs of the developing world. To make the iPhone cheaper would require something of an overhaul, well… more of an underhaul really. Each and every feature of the iPhone sticks another few dollars on the price tag, and very soon, they begin to add up. A cheaper iPhone would require the trimming of many of those features in order to bring the price down, we’re talking a less powerful camera, a less powerful processor, perhaps a less impressive screen, smaller storage, maybe even different materials. The problem there is that when you take away all those features, the phone you’re left with, isn’t an iPhone…
Sure, Apple could turf out all the expensive parts of the iPhone, to make it affordable for the developing world, but the phone would suck. In the developing world, the popular phones are the cheaper, low end Android phones (or BlackBerries), and that simply isn’t Apple. And besides, Apple has been catering to the lower price market for a long time, dropping the price of the old iPhone as it releases the new one. Granted, those customers aren’t getting the cutting edge iPhone experience, but they’re certainly getting a better experience than the one offered by the cheap Android options.
Don’t expect the iPhone to come in any kind of downgrade, budget form any time soon, perhaps even ever. The ethos of Apple and the principal features of its products represents a premium experience that rules out the possibility of a cheap iPhone. I’m sure that Apple understands the importance of capturing the success that can be found in selling to these developing markets, but a cheaper iPhone is not the way to do it.