A Respectful Conversation Regarding The iPhone Nano

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    Posted: 27 June 2011 10:06 PM #16

    iOSWeekly - 28 June 2011 12:02 AM

    iPhone Air:  Slimmer design (slimmer, smaller capacity battery), ipod touch class retina display, 3G only, smaller bezel, lower clocked CPU & GPU to conserve power, 5MP camera + front facing camera, 720p max video recording, no airplay mirroring.

    The slimmer design would appeal to many people over the “full-featured” iPhone 5.

    iPhone Air 8GB:  $449.00 (free subsidised)
    iPhone 5 16GB:      $649.00 ($199.00 subsidised)

    Where does the iPhone 4 fit in?

         
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    Posted: 27 June 2011 10:09 PM #17

    adamthompson3232 - 28 June 2011 12:24 AM

    I think in 2-3 years Horace will be right.

    http://www.asymco.com/2011/06/27/the-four-year-ol/

    I don’t think that’s the time frame Horace is implying. I also don’t think Tim Cook would have brought up the topic of the prepaid market a few months ago if the time frame is 2-3 years away.

    The time may be soon at hand that maturity coupled with limits of organic growth are leading the four-year-old iPhone to finally be re-defined as more than a post-paid skimming entrant. It may be time for the iPhone to more than just grow. It may be time for it to grow up and take on the whole market. Five billion people are waiting.

         
  • Posted: 27 June 2011 10:15 PM #18

    China mobile has more middle class customers
    than US as a country . If not this year, very soon.Asymco
    shows more postpaid customers in Asia than US
    and Canada together. Why would Apple go after
    lower profit market when it can’t even maximize
    the higher profit side due to production constrains?
    What am I missing?to use analogy, restaurant can’t make enough
    steaks at 20$ a pop, so let’s use the grill
    to warm up garlic bread instead?
    Me thinks get another grill and buy more meat!!

         
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    Posted: 27 June 2011 10:16 PM #19

    adamthompson3232 - 27 June 2011 10:39 PM

    If Apple is dumb enough to launch a cheaper ?iPhone? in the near future (they aren?t) the phone will not be called iPhone. iPhone is iconic and Apple will not damage it by introducing a low end “iPhone” for the masses.

    No offense, Adam, but I’ll file this away as future claim chowder. :-D

    It sounds to me like you agree that a cheaper iPhone is inevitable, just that it won’t arrive for another 2-3 years. What would Apple call this cheaper phone 3 yrs. from now?

         
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    Posted: 27 June 2011 10:26 PM #20

    mstefa - 28 June 2011 01:15 AM

    Why would Apple go after lower profit market when it can’t even maximize the higher profit side due to production constrains?

    The iPhone 3GS has lower margins than the iP4. Why does Apple bother to keep making these when they can’t make the 4 fast enough? In fact, why does Apple bother with the iPod touch since it probably has the smallest of margins of all iOS devices.

    These devices are physically very different. I don’t think production of one will impede production of the other. Can anyone provide an explanation of why production of the iPod touch actually slows down Apple’s ability to produce the iPhone 4? Even if the iPod touch were to use the A5, would that really be a bottle-neck?

         
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    Posted: 27 June 2011 10:33 PM #21

    Drew Bear - 28 June 2011 01:06 AM
    iOSWeekly - 28 June 2011 12:02 AM

    iPhone Air:  Slimmer design (slimmer, smaller capacity battery), ipod touch class retina display, 3G only, smaller bezel, lower clocked CPU & GPU to conserve power, 5MP camera + front facing camera, 720p max video recording, no airplay mirroring.

    The slimmer design would appeal to many people over the “full-featured” iPhone 5.

    iPhone Air 8GB:  $449.00 (free subsidised)
    iPhone 5 16GB:      $649.00 ($199.00 subsidised)

    Where does the iPhone 4 fit in?

    Yes, a different form factor would attract some new buyers who otherwise may not have considered an iphone (I know a few females who dont like the weight & blockiness of the iphone 4)

    I envisage the current sales model of the “previous year model gets cheaper” to be replaced by a new iPhone Air model every year instead. So the tech of the previous years premium iPhone would slowly migrate down to the iPhone Air each year.

    Would be very similar to the macbook Pro vs macbook Air arrangment - the macbook air CPU power will always be less than the macbook pros. and macbook pro will always have more features than the Air (for instance at present it has an optical drive, higher storage capability, more screen size options, more connectors, more ram options, backlit keyboard).

    Signature

    Full Disclosure:

    - Long Apple
    - Pro: Apple HDTV, iPhone Air, Stock split, Consumer robotics

         
  • Posted: 27 June 2011 10:36 PM #22

    It’s different when you continue to sell product
    once new as discounted as opposed to develop new
    cheaper one. Develop new and better sell last years as cheaper.
    This way your r&d goes towards higher margin ..

         
  • Avatar

    Posted: 27 June 2011 10:42 PM #23

    mstefa - 28 June 2011 01:15 AM

    China mobile has more middle class customers
    than US as a country . If not this year, very soon.Asymco
    shows more postpaid customers in Asia than US
    and Canada together. Why would Apple go after
    lower profit market when it can’t even maximize
    the higher profit side due to production constrains?
    What am I missing?to use analogy, restaurant can’t make enough
    steaks at 20$ a pop, so let’s use the grill
    to warm up garlic bread instead?
    Me thinks get another grill and buy more meat!!

    if you head over to the AFB 3Q estimate index apple is predicted to be producing less iphones this quater than Q2, so it is pretty hard to argue apple hasn’t caught up production wise with current demand. likewise the shipping within 24 hours from the apple store for iphones has been there all year - the iphone demand/supply equation is now solved.

    Signature

    Full Disclosure:

    - Long Apple
    - Pro: Apple HDTV, iPhone Air, Stock split, Consumer robotics

         
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    Posted: 27 June 2011 11:10 PM #24

    Deleted.

         
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    Posted: 27 June 2011 11:20 PM #25

    mstefa - 28 June 2011 01:36 AM

    It’s different when you continue to sell product once new as discounted as opposed to develop new cheaper one. Develop new and better sell last years as cheaper. This way your r&d goes towards higher margin ..

    That’s why I’m thinking a 3GS modified for the prepaid market might fit the bill. Anyone know what would need to change in order to make the 3GS a prepaid phone?

         
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    Posted: 27 June 2011 11:26 PM #26

    adamthompson3232 - 28 June 2011 02:04 AM

    The only thing that bothers me is that Yukari Kane from the WSJ reported that it would be coming and I think Apple feeds her info. Hopefully in this case it was a bit of misdirection to throw off the competition.

    Are you referring to the article earlier this year about a half-sized iPhone? That now seems less likely to me than simply a cheaper iPhone 3GS (modified). I think Apple could probably make such a small phone work, but it would be a very different UI/UX.

    http://www.macobserver.com/tmo/forums/viewthread/79983/P45/#544426

         
  • Posted: 27 June 2011 11:31 PM #27

    iOSWeekly - 28 June 2011 12:35 AM

    Horace is by far & away the most intelligent person I have ever had the pleasure of reading/listening to when it comes to the mobile computing industry.

    Present company excepted, of course.

         
  • Posted: 27 June 2011 11:40 PM #28

    Drew Bear - 28 June 2011 01:16 AM
    adamthompson3232 - 27 June 2011 10:39 PM

    If Apple is dumb enough to launch a cheaper ?iPhone? in the near future (they aren?t) the phone will not be called iPhone. iPhone is iconic and Apple will not damage it by introducing a low end “iPhone” for the masses.

    No offense, Adam, but I’ll file this away as future claim chowder. :-D

    It sounds to me like you agree that a cheaper iPhone is inevitable, just that it won’t arrive for another 2-3 years. What would Apple call this cheaper phone 3 yrs. from now?

    There’s enough Claim Chowder on me to feed greater Boston Metropolitan area for over a decade. But I’m with Adam on this.

    Here’s my argument. Apple may come out with something, but it will not be simply cheaper or smaller. Like the iPod Nano and the MacBook Air, there will be something compelling about it, aside from price, that distinguishes it from its sibling products and speaks to the masses. What this will be, I do not know.

    So put me down for a lower priced phone, maybe. A cheaper phone, no way.

         
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    Posted: 27 June 2011 11:43 PM #29

    Until very recently, I would have been the “No way” camp. Since then, I’d thought about what a lower model unsubsidized phone would mean.

    During my thought process, I recalled the last conference call where Tim Cook was asked about the PayGo:

    Gene Munster - Piper Jaffray Companies

    And a question first on the iPhone. Demand, obviously, has been phenomenal. And if we look down the road at the opportunity in the post- versus the prepaid markets, are there any considerations that you can share in terms of—that you weigh, in terms of price or subsidies or growing market share in this large prepaid market?

    Timothy Cook

    Gene, it’s Tim. Our focus has very much been on China. We wanted to understand that market and understand the levers there. And as I said before, we’re—iPhone sales were up over 3x during the quarter. And in the first half, we did over 5—just slightly under $5 billion in Greater China in revenue, which is about 10% of Apple, to put it in perspective. And it wasn’t but a couple of years ago that, that number would have been less than 2. And so it’s a sea change. And that’s certainly not, what I would call, a classic post-pay market by any means of the imagination. And so we have some ideas about other countries as well. I’m not in a position that I want to share those today. But we purposely put the bulk of our emphasis from an emerging market point of view on China to really learn, and then we’re going to take that learning to other markets.

    Gene Munster - Piper Jaffray Companies

    Would you know if China, if more than half of—do you know if more than half of China is prepaid?

    Timothy Cook

    I think considerably more than half of China’s prepaid, Gene. I think the first digit would start with a 9.

    When taking this with the comments by TC in the January CC where he said China was a priority, to me this suggests that Apple (and more appropriately, TC) is looking at a PayGo phone. If not for all markets, then at least for China.

         
  • Posted: 27 June 2011 11:57 PM #30

    CdnPhoto - 28 June 2011 02:43 AM

    Until very recently, I would have been the “No way” camp. Since then, I’d thought about what a lower model unsubsidized phone would mean.

    During my thought process, I recalled the last conference call where Tim Cook was asked about the PayGo:

    Gene Munster - Piper Jaffray Companies

    And a question first on the iPhone. Demand, obviously, has been phenomenal. And if we look down the road at the opportunity in the post- versus the prepaid markets, are there any considerations that you can share in terms of—that you weigh, in terms of price or subsidies or growing market share in this large prepaid market?

    Timothy Cook

    Gene, it’s Tim. Our focus has very much been on China. We wanted to understand that market and understand the levers there. And as I said before, we’re—iPhone sales were up over 3x during the quarter. And in the first half, we did over 5—just slightly under $5 billion in Greater China in revenue, which is about 10% of Apple, to put it in perspective. And it wasn’t but a couple of years ago that, that number would have been less than 2. And so it’s a sea change. And that’s certainly not, what I would call, a classic post-pay market by any means of the imagination. And so we have some ideas about other countries as well. I’m not in a position that I want to share those today. But we purposely put the bulk of our emphasis from an emerging market point of view on China to really learn, and then we’re going to take that learning to other markets.

    Gene Munster - Piper Jaffray Companies

    Would you know if China, if more than half of—do you know if more than half of China is prepaid?

    Timothy Cook

    I think considerably more than half of China’s prepaid, Gene. I think the first digit would start with a 9.

    When taking this with the comments by TC in the January CC where he said China was a priority, to me this suggests that Apple (and more appropriately, TC) is looking at a PayGo phone. If not for all markets, then at least for China.

    Did you (all) see this chart from Asymco?

    It takes your breath away.

    You can find it and Horace’s artcle, here.