Friday, February 11, 2011

Speculations for a Cheaper iPhone

On Thursday, February 10, Bloomberg reported that Apple is working on some different versions of the iPhone. These new versions will be cheaper (like around $200), feature a CDMA/GSM dual-mode, and have a “universal SIM.”

The report has not yet been confirmed by Apple, but it is saying that the new, cheaper iPhone should be out this summer. They did add though that there is always a chance that a device such as this could be postponed or cancelled.

The report from Bloomberg claims that the cheaper iPhone would be smaller and cost around $200. The report goes on to say that you will not need to purchase a contract, but it will include certain aspects of today’s iPhone. It is also believed that Apple is working on a dual-mode CDMA-GSM phone, as well as a “universal SIM” that would allow users to switch between GSM networks. This would be accompanied by software that would give users the ability to configure their own phones.

Now the universal SIM technology seems to be confirmed by a patent of Apple that was described as “dynamic carrier selection.” What this would do is allow users to pick which wireless carrier they wanted to use for their service plan depending on quotes that they received from each different carrier.

"According to one embodiment of the invention, access to a wireless cellular communication network can be provided by storing a network address on a mobile device," the patent reads. "The network address can identify a mobile virtual network operator server storing mobile network operator data for use by the mobile device. A request for network operator data can be sent from the mobile device to the mobile virtual network operator server, and in response to the request, network operator data can be received. A network operator for the mobile device can be selected based on the received network operator data, and communications can be conducted using the selected network operator."

Now that Verizon Wireless is providing a Verizon iPhone, the biggest complaint about the iPhone seems to be the price. Right now, the iPhone is available from Verizon and AT&T for $199 with a contract and $699 without. Compared to the competition though, the iPhone doesn’t seem that expensive. Right now, the Droid Incredible from HTC is costing users $299 with a contract.

There are some issues with a cheaper iPhone though. It would have to be manufactured in an extremely cheap fashion without sacrificing any of the iPhone’s quality. This would have to happen if Apple were to maintain its profit margins. The profit margins that Apple has are some of the highest in the industry.

According to an analysis that was released by IHS iSuppli on Thursday, February 10, if Apple wished to produce a phone that was on par with the iPhone 4 in all ways, the company would have to spend $178.45 per phone to produce them.

"With the CDMA iPhone 4, Apple Inc. has shown once again that it never recycles a product design," said Andrew Rassweiler, senior director, teardown services, for IHS, in a statement. "Apple's new designs always exhibit changes, evolution and optimization. This approach is evident not only in the antenna design but also in items like the integrated GPS functionality and the shrinking of the Wi-Fi/Bluetooth combo module. As we dig deeper into our teardown analysis, we're certain that we will find a host of other tweaks all designed to improve quality but keep costs on a steady path of decline."

In Bloomberg’s report though, they claimed that the new, cheaper phone would be close to a third smaller than the iPhone 4. Why is this important? Well, according to iSuppli, the 3.5 inch, 960 x 640 screen of the iPhone 4 costs $37.80 and is the second most expensive component of the device. So if the new iPhone’s screen is a third of the size of the iPhone 4’s, that could really cut some cost.

It will be really interesting to see where Apple goes with these possibilities for the iPhone. Of course all of this could be rumor, but it all seems to make sense and match up with what we know that Apple is patenting and working on right now. Hopefully it really will be summer when we see this new iPhone, but until we hear something from Apple, I guess we are going to be left in the dark. is news of, for and by SMBs! The Small & Medium Business Magazine!

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