Analyst says Apple won’t release low-cost iPhone unless it can lead prepaid category

Aug 5, 2011
Tech

It might sound like a no-brainer given Apple’s business philosophy, but after meeting with two top executives at the tech company, a financial analyst believes Apple will only release a prepaid version of the iPhone if it can be the top device in that category. According to a story from Apple Insider, Mike Abramsky of […]

It might sound like a no-brainer given Apple’s business philosophy, but after meeting with two top executives at the tech company, a financial analyst believes Apple will only release a prepaid version of the iPhone if it can be the top device in that category.

According to a story from Apple Insider, Mike Abramsky of RBC Capital Markets met with Apple Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer this week, and afterward reported that, “Apple’s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience.”

That’s a significant position because there have been rumors circulating that Apple might be launching a second iPhone this fall to go alongside the iPhone 5 it is rumored to be releasing sometime in the next two months or so. The rumor of a cheaper, prepaid iPhone started when analyst Chris Whitmore of Deutsche Bank speculated that it was time Apple attempt to capitalize on the massive prepaid market, which makes up two-thirds of the 1.5 billion worldwide mobile customers. Since then, other rumors have suggested that Apple might really be looking to get into the prepaid market.

It makes sense with Apple’s expansive strategy, which Abramsky also addressed. Apple has seen huge gains in overseas markets like China, and the prepaid system is huge in Europe. Finding a way to create a cheaper iPhone would allow Apple to tap big markets it probably isn’t getting much of a piece of right now, but Whitmore’s reasons for the original speculation were just financial; he identified a market in which Apple was not competing. Abramsky’s report suggests that if Apple does want to get into prepaid, it won’t be doing the job halfway.

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An Australian iPhone 5 patent?

Meanwhile, speaking of iPhones, a weird Australian patent discovered by tech blog Channel News in that country suggests it could be the iPhone 5. The document is for a patent of what seems to be an iPhone, although it was logged about a year after the iPhone 4 was released, which seems to show pretty definitively that it’s not some leftover or extra iPhone 4 patent that didn’t actually get used.

The entire patent document is available here. Channel News pulled some of the more important portions that make the device sound like a new iPhone:

The patent description describes the device as being manufactured from a single sheet of metal. Apple claims that their application is for a device that is lighter and thinner than previous Apple devices. Drawings attached to the patent application indicate an iPhone type device that has a bezel edge. The patent application goes on to detail the problems associated with the manufacture of the device.

Unfortunately, that PDF doesn’t include any drawings, but that sounds quite a bit like the mockups, rumors and supposedly wild-roaming iPhone 5 images that have been floating around of late. So throw another log on that rumor’s fire – it’s sounding more and more like we’re beginning to know what the iPhone 5 will look like.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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