Ever since Apple got into the phone business, there seem to have been people wanting, crying for, or even demanding an ‘iPhone Nano’. This mythical beast has so far managed to live entirely in people’s imaginations. But, as we approach the release of yet another iPhone (5, 4s, or whatever it will end up being called), the cries for a ‘Nano’ version are strong yet again.
So here’s the thing. Apple could, of course, decide to release two new iPhones this September. With tens of billions of dollars of cash, Apple can pretty much do anything it (or, better said, Steve Jobs) wants to. Just as the Nano crowd has begged for so long, one of the new models could be the usual incremental update to the previous iPhone (which is the iPhone 4).
The other device could very well be a cheaper iPhone. And Apple could even call it Nano, although the similarity that it would have with the other Nano product in Apple’s portfolio would stop at the fact that it’s cheap. Anyway, Apple could go ahead and create a plasticky contraption, slap a small screen on it, and launch it into the (mostly developing) world. It could do all this, although it probably won’t.
See, just as Florin explained yesterday, Apple has the habit of keeping the old model iPhone around when a new one gets released. The older model is usually sold for $99.99 with a two-year contract in the US, which is precisely half of the price of the new device. So if you want an iPhone, but don’t necessarily want to fork out $200, you can get the older model cheaper. That is happening right now too. The iPhone 3GS can be had for a mere $49, even.
So it’s conceivable that Apple will do the same thing with the iPhone 4. But it could go even further. As per Florin’s logic, Apple could sell the 16 GB iPhone 4 for about $250 unlocked, and give it away for free with a new contract, while still making a small profit.
Or, if it wanted to sell it even cheaper (or make more money in the process), Apple could decide to launch an 8 GB iPhone 4. The reduced storage space would probably not be a deal breaker for those eager to be a part of Apple’s ecosystem, and it would allow Apple (well, its Asian partners) to make the device for even less.
And it turns out that’s exactly what’s happening. According to Reuters, Apple’s partners are busy building an iPhone 4 with 8 GB of internal storage space. The 8 GB drive is being manufactured by a Korean company and the phone is expected to launch within weeks. Both of Reuters’ sources seem to have mentioned that the resulting iPhone will be cheaper than before, so Apple’s intent here is pretty clear. It’s almost a certainty now that Apple will announce this cheaper iPhone 4 version in September, and that it will ship alongside the new iPhone.
Of course, Apple could announce the new iPhone, the cheaper iPhone 4 as well as an even cheaper iPhone Nano, but… three new(ish) products at once? Somehow I don’t think that’s plausible, given Apple’s reluctance to launch more than one new phone per year. So, for all intents and purposes, this 8 GB iPhone 4 may just turn out to be the iPhone Nano that everyone’s been waiting for.
However, for Apple to realize the dream of all those iPhone Nano preachers, it has to do one more thing. See, the ‘discounted old model’ policy has been enforced in the US, and perhaps some other ‘big’ developed markets. Yet a cheaper handset, as good as it is to drive some sales in such markets, is most important in developing markets, where it could just be the only Apple product most people will ever afford to buy. Therefore, launching this 8 GB iPhone 4 in such markets is critical. As is keeping its discounted price and not letting partners set the pricing. If it does that, then Apple will be able to truly enter the smartphone mass market.
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