14 DAY TRIAL // RBC analyst Mark Abramsky issued a note to clients yesterday, revealing his anticipation of a sub-$100 Apple handset hitting the market this summer. Abramsky is apparently talking about a stripped-down version of the 3G model, but not an iPhone nano, according to The Business Insider.
We can't help but wonder why on Earth Apple would use its resources to develop a lower-specced iPhone that is not a nano, and not simply sell the first-gen model for less cash. But hey, we're not analysts so, we'll just sit still with this question mark hovering above our heads for a while.
So, here's what Abramsky is thinking, according to the aforementioned source.
“The main cost reductions would come from fewer features ... or something without a multi-touch screen.” The analyst thinks such a device might have “a lower-resolution camera, no 3G Internet access or GPS, and a cheaper data plan (~$15/month) with a usage cap,” reads the report, which mentions how this might come into conflict with the carriers' wishes.
“Meanwhile, the iPhone 3G will get feature upgrades, such as a better camera, video capabilities,” the analysis continues. Additionally, “Apple could sell 20-30 million of these cheaper iPhones in fiscal 2010, boosting Apple's smartphone market share to almost 20%,” Abramsky allegedly forecasts. He also predicts that there will be side effects, such as cannibalization of iPhone 3G and iPod sales.
For those buying an iPhone just for the apps, we can see that. However, if even first-gen iPhone features are kept from making their way into this yet-unconfirmed $99 device, it will be interesting to see how this phone will sell the way Apple wants to sell its products. But again, we're not the analysts.
“And a lower subsidy and lower margins means Apple will have to sell three times as many to make the same gross profit from one iPhone 3G,” the report continues. Abramsky expects iPhone gross margins to shrink to 35%-37% from 50%+ in fiscal 2010.
Perhaps we should also remind our readers that Apple doesn't like to play in the low-end market. Tim Cook, Apple's current acting CEO said during a Q&A at the company's '09 Q1 Conference Call that they just don't see the nano iPhone happening.
Replying to a question about the possibility of Apple developing such a device, Cook said, “You know us, we’re not going to play in the low-end voice phone business. That’s not who we are. That’s not why we’re here. We’ll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone.”
If Apple does plan to roll out a $99 iPhone this year, what do you think those specs will be?