Phil Schiller, Apple’s SVP of Global Marketing, said in an interview to a Chinese newspaper that “cheap smart phones will not be developed in order to grab market share away”. There have been a number of analysts, especially over the past few days, and the Wall Street Journal who have speculated that Apple will come out with a lower priced iPhone in potentially a smaller format.
Over two billion app downloads in December alone with a total of over 500 iTunes Store—and therefore App Store—accounts. Keep in mind, Apple has clarified in the past that it only considers the initial download of an app in “downloads”; updates don’t count.
Plus, according to an estimate by analyst Benedict Evans, which he thankfully clarified for me, Apple has likely sold around 525 million iOS devices.
A few thoughts on the latest report of a “less-expensive” iPhone by Jessica E. Lessin for The Wall Street Journal:
1) This report seems to surface every year, including by the same Wall Street Journal that is reporting the news today.
2) That said, there does seem to be more gathering momentum around the idea of a “cheap iPhone” this time around. I smell a faint hint of Apple.
3) But Apple already sells “cheap iPhones”: the iPhone 4S is currently $99 with a two-year contract and the iPhone 4 is free with the same contract. Hard to get cheaper than “free”. (But: see point 6 below.)
4) So perhaps this has to do more with perception. The current cheaper iPhones must lose some luster as they’re simply older devices at a discounted price. Maybe this new “cheap iPhone” would be a complete makeover with the same internals as the older models but with a new build to entice buyers.
5) Along those lines, I find it hard to believe Apple would simply do a “cheap iPhone” — it would have to be a different product from the flagship version in some other way. Offering various colors is an obvious approach, but I think there would have to be something else as well. There are no “cheap iPads” or “cheap iPods”, there are significantly different versions (iPad mini, iPod nano, etc) at different price points.
6) Or perhaps this is all simply meant for other markets where the iPhone does not sell as well (and subsidies matter far less, or don’t exist at all). As WSJ notes, the iPhone is still the top selling smartphone in the U.S. But that’s not the case in other markets, and China has been particularly troublesome. Apple probably doesn’t want to just cede a billion potential users to cheap Android devices.
7) But I don’t think Apple would do a device just focused on particular foreign markets. Their product lines are very simple and for the most part worldwide. I imagine that any “cheap iPhone” would be on sale in the U.S. as well. So… pre-paid?
8) I do think Apple has to be careful here. While Gene Munster doesn’t seem too worried about the margins (thinking this phone would attract users that wouldn’t normally buy an iPhone), if such a device was popular enough, it would definitely drive down Apple’s famous margins. Users, of course, won’t and shouldn’t give a shit about that, but investors will (and Apple should — the iPhone dominates their bottom line). Just wait until we see what the iPad mini does to the margin this quarter.
For the 20th (!) year in a row, IBM was granted the most patents in 2012.
Google and Apple were both up significantly over previous years — but only came in at numbers 21 and 22 on the list, respectively. Each were granted about 5,000 (!) fewer patents than IBM for the year.
The app is useful for both those who have a cold and those who don’t. It scans your friends’ Facebook profiles for keywords that may signal illness such as “coughing,” “sneezing,” or even “nurse.” It also reviews all your friends’ check-ins to see if they’re up late at night (sleep deprivation), which makes them more likely to catch a cold.