Cheaper iPhone On the Way…or not?

I’m a realist. Sometimes I can be a bit cruel with the truth, but it’s useful in debunking the crap that newspapers spew when times are tough and there isn’t enough tech news to go around. Rumors continually driven by a certain publication (the Wall Street Journal) seem to point towards a cheaper iPhone on the way. Here are a few reasons why that’s an absolute load of…something.

More rumor realism- Apple in 2013.

First of all, what would a more affordable iPhone be like?

  • Lower specs than the current iPhone of the time. That means an older processor, graphics, etc.
  • Older, lower resolution camera.
  • a bit heavier, with a shorter battery life

Sound familiar yet?

This iPhone that everyone covets already exists. Apple sells older model iPhones, which serve as basically lower-end phones, for as little as the price of free with contract, and only about one hundred dollars unlocked. Literally, the phone that newspapers have spent hours speculating on already exists…and nothing new is in the works.

Whenever Apple releases a new phone, the price of the previous model is driven several hundred dollars lower. It’s still the same great phone, but at a lower pricepoint. As the iPhone 5S (or 6, whatever) hits the market, the price of the iPhone 5 is going to be comparable to that of mid-range smartphones (i.e Google Nexus 4- review here). The iPhone 4S, still a great phone, will be as affordable as nearly any android phone, making it a perfect affordable choice- and taking over the role that the iPhone 4 currently fills.

There’s no new “affordable” iPhone on the way

Here’s the great thing about Apple’s model. Their older iPhones have all the cost benefits of lower-end phones, but Apple doesn’t have to remarket them, build infrastructure to produce them (because they’ve already been making them for years), or worry about unsold infrastructure.

Apple’s ultimate goal is to provide the most value to their shareholders, and the fact is that the margins are higher on older phones (more made = lower cost per unit), and take up much less resources. Apple has no reason to make a low-cost iPhone, separate from its’ current models, so it’s (probably) not happening.

Michael Sitver

Michael Sitver is a technology insider who has been blogging about technology since 2011. Along the way, he's interviewed founders of innovative startups, and executives from fortune 500 companies, and he's tried dozens or hundreds of gadgets. Michael has also contributed to works featured in Newsday, The San Francisco Chronicle, and the associated press. Michael also occasionally consults, and writes for Seeking Alpha and Yahoo News.

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