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"Category-killer" experience required by Apple to go after an entry level smartphone

Posted: , by Daniel P.

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Now, many rumors and wishful thinking are pegging Apple at going after the 1 billion strong prepaid market with a more affordable handset than the next iPhone. Even Apple's Tim Cook himself hinted at the idea not long ago.

This last one, however, comes straight from the RBC analyst Mike Abramsky, who met with Tim Cook and Peter Oppenheimer on Wednesday, and issued "key takeaways" from the conversation.

While we don't know if these exact words have been used by Apple's senior managers, Abramsky writes that Apple is considering an entry level smartphone only if it provides "innovative, category-killer" experience. We'd say that whatever iOS-powered gizmo Cupertino produces for $100 bill of materials, slaps its logo on it, and sells it for $250-$300, will eat a sizeable chunk of the prepaid market anyway.

This might be the iPhone 4 fusion we saw suggested the other day, with the dual-core A5, but cheaper plastic chassis, an updated iPod touch with cellular radios, or something completely novel - it will still be the unique Apple experience, if it runs iOS, and will keep the huge profit margin range Cupertino enjoys on each of its cell phones. The watered down iPhone 4, however, might only be going to exclusive agreements with carriers like China Telecom, alongside with the premier next iPhone, as we heard the other day, while Apple is slowly testing the water for a full-on assault of the huge prepaid market. Such a move would definitely not be for financial, but rather strategic reasons, as Apple rakes in 2/3 of the mobile industry profits with only 6% of the market anyway.

Let's not forget also that Cupertino was working with Gemalto on a programmable embedded SIM module, which will allow you to switch carriers via a simple app, before the European carriers went Tony Soprano and threatened to cut the subsidies for the iPhone, afraid they might be rendered mere dumb pipes for voice and data by such a move. Apple might not have given up on the idea, though, and kept it for these eventual entry-level phones for emerging markets altogether.

via AppleInsider

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posted on 05 Aug 2011, 04:50 3

1. saiki4116 (Posts: 404; Member since: 31 Mar 2011)

launch it in INdia.I bet it will be a success

posted on 05 Aug 2011, 05:32 7

2. shafboy (Posts: 179; Member since: 26 Sep 2010)

Launching it almost anywhere will be a success if its Apple right?

posted on 06 Aug 2011, 01:38 3

7. jroc74 (Posts: 6019; Member since: 30 Dec 2010)

Basically. They could launch it into orbit and it would be a success...

posted on 05 Aug 2011, 10:28 5

3. r2212xx (Posts: 41; Member since: 18 Apr 2011)

If Apple does launch it then surely it might be a success everywhere. But the bonus factor is that it will help Apple gain a strong share in the developing countries phone market where iPhones are still on the expensive end and are considered to be the phone for the affluent.

posted on 06 Aug 2011, 10:59

8. dandirk (Posts: 187; Member since: 04 Aug 2011)

The problem with that theory is that Apple makes HUGE margins, especially in the Asian market BECAUSE the phones are for the affluent.

Less so in the states, but the spin is they are still "cool".

While iOS and iphones work well together and they are stable good devices. A large part of their success is still image and marketing.

Will be interesting to see if Apple can keep that image with cheap plastic versions. The porche 924 and 944 were considered a watering down of the brand... Though Porche Boxter does have a bit more respect...

posted on 05 Aug 2011, 12:01 8

4. GALAXY-S (Posts: 701; Member since: 07 Jun 2011)

All iphones are entry level smart phones already... ???? they are the picture books in the smartphone world...

posted on 05 Aug 2011, 16:05 2

5. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

Is that why you're named after an iPhone knock off?

posted on 05 Aug 2011, 16:25 4

6. GALAXY-S (Posts: 701; Member since: 07 Jun 2011)

i think the iphone will now be an android knock off after their "update"

posted on 06 Aug 2011, 11:03 1

9. dandirk (Posts: 187; Member since: 04 Aug 2011)

Once could say the iphone 5 is a knock off of the SG/SG2. If the recent images are accurate.

Sorry Taco design "knock off" arguments (at least visual/physical design) does not hold water, because virtually every industry does it, especially technology.

posted on 06 Aug 2011, 12:09

10. YoseYO (Posts: 8; Member since: 02 Feb 2011)

Imagine if the next iPod will actually be prepaid enabled, it would sell like hot-cakes lol

posted on 06 Aug 2011, 14:55

11. beillax (Posts: 24; Member since: 03 Aug 2011)

It's funny because whenever I see an android headline on Phonearena I don't click on it because i am not an android person. But when I click on iPhone headlines, android people are always commenting things like "the software is outdated" or "apple sucks". If Apple sucks so bad why did you waste your time even opening up this article??

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