Cheaper, Smaller Apple iPhone Will Be A Cash Cow: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2011-02-14 Email Print this article Print
 
 
 
 
 
 
 

Speculation abounds that Apple is working on delivering a cheaper iPhone to customers later this year. If it does, massive sales will generate boatloads of new revenue for Apple.

Apple could be working on a new iPhone that would be smaller and cheaper than current versions of the device, according to recent reports from the Wall Street Journal and Bloomberg. So far, Apple hasn't confirmed that such a device is on track for shipment later this year, but some speculate that the device will cost half as much as current versions of Apple's smartphone.

Whenever rumors start to swirl about the possibility of a new Apple product hitting store shelves, everyone seems to chime in on whether or not the device will perform as well as Apple's earlier iPhone models. In the case of a smaller, cheaper iPhone, that speculation has arisen again.

Read on below to help get the answers to solve that debate. Yes, a cheaper iPhone is a risk, and it's something that Apple hasn't tried yet. But when it's all said and done, a smaller, cheaper iPhone will be a cash cow for Apple.

Here's why:

1. The iPhone 4 is expensive

Although its sales don't necessarily tell this story, the iPhone 4 is an expensive product. Currently, customers who want to get their hands on Apple's smartphone will need to dish out $199 for the 16GB model and $299 for the 32GB version of the device. That's no bargain. And for shoppers on a budget, those price tags are potentially too expensive. But a smaller iPhone that comes in at $99 might just be what those folks have been asking for.

2. More options always means more money

Whether it's Apple, Microsoft, or any other company in the technology industry, the more options customers have at their disposal, the more likely a specific product will sell well. That's why Microsoft sells so many different versions of Windows and why HP and Dell have so many computers for sale. There is no such thing as a "one-size-fits-all" device on store shelves. And Apple is seemingly realizing that with a smaller iPhone.

3. Look at the iPod model

Apple has been successful selling different versions of its products before. The iPod is a prime example of that. After the music player started performing well at retail, Apple offered up smaller versions, like the Mini and the Shuffle (and then the Nano) to appeal more to customers. The strategy worked. Apple's iPod is the most popular personal media player ever released. With the same strategy, Apple might just see the same success with its smaller iPhone.

4. Mobility plays a role

Apple has been able to attract smartphone seekers. But there are still many people using the basic mobile phones that have come to be called "feature phones." These people don't necessarily see the value in switching to a smartphone. A smaller iPhone, though, could help bridge that gap by delivering features of a smartphone, but the price and footprint of a feature phone. Simply put, the smaller, cheaper iPhone might just take advantage of the sweet spot that exists between those who don't want smartphones and those that do.




 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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