Yesterday’s article about iPhone 5c pricing prompted a vigorous discussion on Twitter, and I’m changing my mind on a few points (I told you I have strong opinions weakly held!):
- I was always wavering on the 3G idea:
Imagine an LTE iPhone 5C sold to post-pay carriers, and a non-LTE iPhone 5C sold at a significantly lower price to the rest of the world.
Still, this is the prediction I’m the most uncertain about. After all, the additional cost of LTE is a cost that will assuredly decrease over time, thanks to Moore’s Law and Apple’s scale, and Apple’s operations are predicated on decreasing SKU complexity, not increasing it.
This link from Ted Todorov pushed me back to LTE only:
The RF360 chipset [from Qualcomm] offers support for all seven cellular modes, including LTE-FDD, LTE-TDD, WCDMA, EV-DO, CDMA 1x, TD-SCDMA and GSM/EDGE. If deployed in a next-generation iPhone, Apple could launch a single “universal” handset instead of the company’s current three-model lineup.
Of particular interest is the chipset’s TD-SCDMA operation, as the standard is used by the world’s largest cellular provider by subscribership China Mobile. While Apple has yet to ink a deal with the telecom, many analysts believe a partnership will be a major boon for the continued growth of Apple’s iOS platform.
As I wrote, Apple highly values a simplified product line; 3G-only is not just a different broadband chip, but a different antenna system as well, and less efficient to boot. I think this new Qualcomm chip is an obvious choice for the China reason alone (TD-SCDMA and LTE-TDD), eliminating my low-end model. I just don’t think Apple would do the two SKU solution (although they perhaps ought to)
That Qualcomm chip is likely to be more expensive, making the $299 option that much more unfeasible. The likely “low-cost” aggressive price is $350 then, which may be too high for prepay. Moreover, it’s unclear how Apple would differentiate a free-with-contract model in a way that would justify charging higher prices
Moreover, I’ve received a few tips that $450 is more likely. Therefore, I’m moving from “predict” to “ought to.” I’m going to focus more on this in a separate article.
I still believe the 5C will have the same computing power as the current iPhone 5; setting the Apple-designed A6 as the baseline going forward will reap significant dividends
So here’s my revised view of what Apple ought to do:
- iPhone 5S: aluminum, in-cell touch screen, high-end camera, dual flash, A7 processor, LTE – $650/$199 subsidized
- iPhone 5: aluminum, in-cell touch screen, current camera/flash, A6 processor, LTE – $550/$99
- iPhone 5C LTE: plastic, in-cell touch screen, mid-grade camera/flash, A6 processor, LTE – $350 (but ideally $299)/free
Eliminating the 5 completely is a possibility as well. More on what a higher price – like $450 – would mean soon.