Tiernan Ray, Barron’s:
Regarding a low-cost iPhone, Abramsky writes that â€œAppleâ€™s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience.â€
There is something really wrong about that phrase. What the heck is an innovative, category-killer experience? Do we, as users of Apple products, get to experience category-killing? Sheesh. And who cares about categories?
Apple doesn’t make products based on experiences for itself.* What Apple cares about is making the best product possible, for us. The company makes products based on a deep understanding of what us, the users, want. The iPhone, iPad, the new MacBook Airs, etc. are all product experiences for the users.
I do think Apple will unveil a lower-priced iOS device that makes voice calls. It could be the current iPhone 4 stripped of GSM and/or CDMA baseband chips with voice calls made over a 3G connection. Getting rid of the baseband chip would reduce the bill of materials and reduce overall power consumption.
Not only would the phone cost less, the monthly bills would too. I’ve been looking at ways to get rid of the voice portion of my wireless phone bill and this looks promising. Like the iPad, this lower-priced iPhone would be sold without a contract with only a month-to-month data plan.
The other way to look at it would be an iPod touch with 3G. But this is less likely since the iPod touch is so thin. By continuing to use the current iPhone 4 chassis without a baseband chip, Apple can leverage existing manufacturing infrastructure, parts suppliers, and bring out a fantastic-looking low-cost iPhone.
* Apple does care about making products that please Steve Jobs. It just so happens that what Steve Jobs wants in products is what millions want as well.