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The Low-end iPhone Market

Apple LogoThe always interesting John Gruber offers The Case for a New Lower-Cost iPhone that brings up a number of great thoughts about what we’re all expecting in the next lower end phone named 5C [1].

The idea of Apple abandoning the sale of 4 and 4S phones to lock out all non-lightning adapter phones make lots of sense. This is a great way for Apple to complete the transition of phone adapters and simplify the accessories they stock on the shelves.

Could an iPhone 5C get priced as low as $349, unsubsidized? I think it needs to be even lower if Apple intends to compete in the poorer world markets, but it clearly needs to be much lower than today’s iPhone 5 16GB $649, unlocked and contract free price [2]. This kind of pricing makes me wonder what they’ll remove from the 5C.

Gruber clearly thinks it’s a red flag to remove things like Siri from the 5C, but I think it’ll go further. I think the hardware specs for some features of the 5C might be worse than what we see on the iPhone 4S. We might even see a phone that stores its data completely in Apple’s cloud service, iCloud. Local storage would be so low that nothing but iOS could run. My feeling on these limitations are based on Apple’s almost crazy need for high profit margins. We shall see.

1. I don’t like the name. I think Apple is going to find the “C” stands for “Cheap” and will, for the first time, be stuck with a cheap-looking device.
2. I’m using U.S. prices off Apple’s current website for the iPhone 5.