Report: Apple to launch two phones in September

by Scott Bicheno on 27 June 2011, 15:23

Tags: Apple (NASDAQ:AAPL)

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Forgive us for reporting on the report of a report, but the original source seems quite solid and the ramifications, if true, are profound.

Fortune brings news of a research note written by Deutsche Bank's Chris Whitmore, in which he tells his clients to expect two Apple phone launches this year - generally assumed to be in September.

While tech watchers have been speculating over whether we're going to see an incremental launch - which may be called the iPhone 4S to reflect as much - or a more significant improvement with the iPhone 5 label, Whitmore reckons it will be both. He didn't seem to speculate on specs, but thinks the 4S will be the first iPhone to have a mid-market price.

"With Nokia and RIMM struggling the time is right for Apple to aggressively penetrate the mid range smart-phone market (i.e. $300-500 category) to dramatically expand its [total addressable market] and market share," wrote Whitmore.

This is potentially very scary for the rest of the smartphone business. One of the reasons Android has grown so rapidly is that the iPhone created demand for mobile Internet devices, but is priced at a premium level. The Android ecosystem has been able to exploit mid-market demand by offering their phones for significantly less.

But Apple has shown, with the iPad, that it's prepared to price its products that competitors find hard to beat, and may have decided Android has had it too easy in the mid-market. If it plans to launch an iPhone 5 with the A5 chip, but still has plenty of A4s kicking about, why not use them in a slightly lower-specced phone and charge a couple of hundred dollars less for it?

What remains unproven is how much price has been a factor in limiting Apple's total addressable market with the iPhone. It has certainly sold a lot of them, and the feeling is that anyone who wanted an iPhone has been prepared to pay the premium. Having said that, while $400 or so it hardly impulse-purchase territory, it does allow people to contemplate buying an iPhone without having to sell a kidney, so a whole new market may emerge.

One thing's for sure though, if Apple does decide to launch a mid-market phone there will be a lot of very earnest meetings at the top every other company with an interest in the mobile phone market. They might just have to raise their game yet another level.

In another report, first covered by Apple Insider, Morgan Stanley analyst Katy Huberty wrote that Apple may not be ready to launch its next phone until late September, based on chats she had in Taiwan. She also heard about a cheaper iPhone, and reckons an Apple-branded TV is under development.

 



HEXUS Forums :: 22 Comments

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With Nokia and RIMM struggling the time is right for Apple to aggressively penetrate…
Infinite
With Nokia and RIMM struggling the time is right for Apple to aggressively penetrate…

Stop it
If they did, it would be good and bad. Bad because a shift in market share may lead developers to focus on iOS and neglect Android instead of focussing on both (but tbh they're being silly if they focus on just one, regardless). Mostly good, because increased competition is, well, good. As long as it is increased competition and not the beginning of the end for other operating systems.. which it shouldn't be.
To be honest, I don't see this as being that much different to what they did last year.

They launched a brand new iPhone that was a huge leap up from the previous model, and then reduced the price of the old model, leaving people a choice. Talking purely about contracts here rather than Sim Free - the 3GS was available 100% free on most contracts at that point, whilst the iPhone 4 still carried at least a £100 premium even on £60 a month tariffs.

So they already have a budget iPhone - and I don't think they will drop the price much lower, as a huge part of the iPhone appeal for many buyers is the perceived exclusivity of it - especially of owning the latest one. Dropping the price too far just shatters its image and a large part of the credibility imo.

What has changed this time around is that the iPhone 4 is much much more competitive now than the 3GS was a year ago, so this time around the budget version will still be a premium phone when compared to the vast majority of cheaper Android devices - and definitely compared to all the ones in the sub £400 (Sim free) bracket.

We shall see - I hope that there is at least a decent upgrade to the current iPhone 4, with something that can tempt me. I am going to upgrade in September and it's a choice between another iphone, keeping my iPhone 4 or jumping ship to a windows mobile handset..I have my fingers crossed for the built in solar panels that they patented earlier this year ;)

http://www.patentlyapple.com/patently-apple/2011/01/apple-wins-their-first-solar-powered-patent-for-portables.html
I worry that you may be right on two points:

1. That the iPhone 4S is going to be “S” for smaller capacity, in line with the strategy they employed with the 8GB 3GS, which I consider a very poor value. I am not sure how attractive iPhone contracts have gotten with other network, but the only one that I was interested on release is the 12 months Tesco one. Currently, the price difference between the 16GB iPhone 4 and 8GB iPhone 3GS at Tesco mobile is £85. That's in line with the price difference of the handset on Apple's website (£82). For a 16GB (or even 12GB) 3GS it would've be a viable budget alternative, but 8GB for £428 dire value, and I'd MUCH rather buy a 16GB 3GS second hand for less from friends I know take reasonable care with their devices, or even take a punt on Ebay.

2. I bought my iPhone because it was a good deal, not because it was new. Exclusivity and image be darned as far as I am concerned. I am sure I am not alone on this, though I fear you may be right that Apple will not want to “cheapen” their brand (otherwise the 8GB 3GS would be closer to £300).

On your point about the iPhone 4 being much more competitive than the 3GS was a year ago, I am not so sure. I think that the 3GS brought more of the “need to have” bit over the previous generation than the iPhone 4 which brought more of the “nice to have”.

Anyway, unless the next main iPhone comes with a minimum of 32GB, I fear that the 4S will be stuck with 8GB, and that would be a disappointment. I'd much rather have a 16GB 3GS than a 8GB iPhone 4.