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Apple Working On Cheaper, "Commoditized" iPhone

Tyler Durden's picture


In what may be very disturbing news for the AAPL-borg collective and the broader Hotel AAPLfornia, WSJ is reporting that Apple is working on a lower-end iPhone, a move which it dubs "a big shift in strategy as its supremacy in smartphones has slipped." To call this a big shift is a major understatement: no longer will Apple have the premium, ultra-luxury, aspirational product cache, which for a broad selection of its customers was the primary reason to keep buying iteration after iteration of the company's releases and lining up in droves around the block on release day. Especially since anyone seeking a "cheaper" iPhone could just buy a previous generation iteration of a gadget whose new product launch cadence is now jumping to twice a year, soon thereafter three times, and so on.

This development certainly changes the demand dynamic, not to mention the profit margin aspect of the company's flagship revenue and profit product, as it now will have to directly compete in a market in which it has virtually no experience, and which is dominated by OEMs and other companies that are far better equipped to deal with a war of margin attrition. It also means that going forward, just like the iPad Mini was a smashing success, in cannibalizing regular iPad sales, so ever cheaper iPhone products will increasingly compete with their more expensive, and higher margin alternatives, until the near unlimited cash flow ability of AAPL itself, so long taken for granted, is put into question and as revenues, profits, and EPS expectations all have to be revised lower.

Yet saddest for all those who have watched the progress of this iconic company over the past decade from the sidelines regardless of sentiment, the consumer products "Ferrari" that Steve Jobs built, just announced it is launching its own Yugo.

From the WSJ:

Apple Inc. is working on a lower-end iPhone, according to people briefed on the matter, a big shift in strategy as its supremacy in smartphones has slipped.


While Apple has explored such a device for years, the plan has been progressing and a less expensive version of the flagship device could launch as soon as later this year, one of the people said.

The cheaper phone could resemble the standard iPhone, with a different, less-expensive body, one of the people said. One possibility Apple has considered is lowering the cost of the device by using a different shell made of polycarbonate plastic. Many other parts could remain the same or be recycled from older iPhone models.

Apple, Cupertino, Calif., could decide not to move forward with the device. An Apple spokeswoman declined to comment.

The move towards multiple iPhone models is new territory for Apple. The company has prided itself on prioritizing profits over scale, offering a relatively small number of products targeted at the high end. While Apple has long offered different styles of iPod music players, the company has sold only one main new iPhone model, with different storage capacities, at a time since launching the smartphone in 2007.

All that said, this evolutionary step (the same taken many times in the past by such once luminary firms as, i.e., Nokia and Motorola) is not Apple's fault: the company is merely doing what it can and should, and responding to market developments in a world, in which the end consumer has increasingly less disposable income.


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Tue, 01/08/2013 - 18:26 | 3134305 Cursive
Cursive's picture

Holy LOL!  Steve Jobs is rolling over in his grave.

Tue, 01/08/2013 - 18:32 | 3134326 Buckaroo Banzai
Buckaroo Banzai's picture

If this has been in the works for years, as the article suggested, then Steve Jobs must have given his blessing.

It's a terrific idea. With the kind of economies of scale that Apple can deploy, combined with the premium price they can command for the Apple cachet, they can almost certainly be a profit-margin leader in the dumb-phone/feature-phone marketplace.

Tue, 01/08/2013 - 18:43 | 3134368 Panafrican Funk...
Panafrican Funktron Robot's picture

"combined with the premium price they can command for the Apple cachet"

Said the guy that read 0% of the article. 

Tue, 01/08/2013 - 20:54 | 3134633 MiguelitoRaton
MiguelitoRaton's picture

In other news, Rolls Royce announces a brand extension in the sub-compact category...and expects no brand dilution.

Tue, 01/08/2013 - 20:57 | 3134643 MiguelitoRaton
MiguelitoRaton's picture

If these low-end versions are as fragile as the regular ones, I hope they sell them in disposable 6-packs.

Tue, 01/08/2013 - 23:18 | 3135012 JackT
JackT's picture

We all k is the hardware components are virtually the same across all devices. What makes Apple unique is the aesthetics within its user interface. As well as its base level application requirements and review process.

Take a look at the visuals contained within apps on the AppStore and compare them to those found on Google's Play.

Apple's play to keep strict control over device form factor and uniformity over its OS (not letting 3rd parties pick it apart and skin it) which is something that Google has finally figured out (by making its code base no longer open source).

In essence Apple is 50% form factor and 50% interface. Just as was the case with desktops Apple will not be #1 but rather the premium alternate if even if its shell is transformed into something cheaper

Wed, 01/09/2013 - 00:51 | 3135238 Manthong
Manthong's picture

That strategy worked great for Packard in the 1950’s.

Packard never lost its cache’ and brand cult buyers are still standing in line whenever the next low cost Packard automobile is released.  

Wed, 01/09/2013 - 01:03 | 3135280 JuicedGamma
JuicedGamma's picture

Broke my iPhone 3 three times and finally gave up on it.  The HTC with no case has hit the floor, the cement, etc and doesn't have a scratch, so there is something to what you're saying about the fragility of iPhones.

Mon, 01/14/2013 - 18:44 | 3152392 Angus McHugepenis
Angus McHugepenis's picture

Very nicely put.

Tue, 01/08/2013 - 19:15 | 3134426 jmc8888
jmc8888's picture

Or he could have been the one holding it back.  Like the ipad mini.  Which might just mean they've decided to break all of the man who saved the companies advice. 

I wouldn't say it's terrific.  As the article stated and is pretty obvious, people that used to buy a $500 phone might now buy their low end version.  Good for consumers (well not really..another sector where people will still overpay), but not for investors.

If you ask me, many of their versions of iPhones already are low end (well medium end).  Before #5 there were some $200 or less phones that were superior to the iPhone.  Bigger screens.  More flexible OS.  4G.  In a sense, people have been buying phones known as iPhone because they have some unique but mostly worthless differentiators.  Thinking those differentiators made it high end, when everything else screamed middle of the road...except the price.

So if their premium phone often is below medium budget phones, what will their budget phone be?  $300 for a $100 phone? I literally liked my $200 phone better than my friends 4S and I bought it months earlier. 

I don't see this bringing in a new wave of Apple enthusiasts.  I see it more as allowing current Apple enthusiasts the option to continue being one for cheaper.   Might slow attrition to other brands.   But seems like a strategy to minimize attrition rather than expanding sales.   I wouldn't say it's impossible that they find their way and compete down there successfuly.  But it's far more daunting then anything else they've had to deal with on the phone front, and even the enthusiasts are starting to get sick of paying rib eye prices for chuck steak.

Shortening the cycle is good until it isn't.  Once again they've already shorterned to the point it's too short.   That will piss people off or get people to buy 'every other one' instead of 'every one'.   Some of those 'every other ones' might also be the cheaper one too.  The more they shorten it, the more likely it becomes 'every three phones'.  Phones can easily last five years if you don't drop them.

The top line may or may not increased based on the actions of this decision (aside from anything else), but one thing is for sure, margins will suffer.  Adding more sku's, cheaper sku's, and bringing them faster will assure that.  Even one could, but all three? 

They're starting to get caught up in their own propaganda game.  They can't sell the older phones as the cheaper phones, they have to create a fake cheaper phone, with all the associated costs of bringing another sku online.  It's nice to know they may use the components of some of the earlier iphones in there, but it still is a new SKU.  If they promote it, then a new advertising cost.  So on and so forth.

We've all seen, probably dozens of times, when something 'hot' lowers its status, it withers away.  Apple also risks that.

Seems a bit vain to create an ipad mini and a cheaper iphone rather than just sell your older products for cheaper.  Especially since the cycle is short and about to be even shorter. 


Tue, 01/08/2013 - 20:26 | 3134580 TraderTimm
TraderTimm's picture

There's a parallel here to the fashion industry - clothes that are perceived to be 'cool' are priced just out of reach of the lower end, but the high end customer saves them on sales.

If anybody can buy one, the uptight fanbase may not want to be seen with the next iteration, even if they maintain a tiered price/product strategy (which I personally doubt). Lets face it, half the reason anyone was toting these phones around with the brilliant white earphones was to be "seen".

When billy bob can pick one up at WalMart, that'll take the exclusive allure away, which in turns alienates all those precocious fans willing to pay a higher price. Welcome to razor-thin marginville Apple, population - You.


Tue, 01/08/2013 - 21:35 | 3134733 billsykes
billsykes's picture


Or it could be a sign of passing the touch- remember when Nokia had huge share then Motorola came out with their Razor flip phone, candy bar phones proclaimed dead and then came a

company called Blackberrry (remember blackberry thumb?) that everyone had to have, then it was the IPhone.

Next it will be Android, and then who knows.... maybe a Windows 9 phone. 

Fact is everyone gets cocky and fat then dies. It’s the business cycle. Ever wonder why Olivetti or brother or Xerox don’t dominate the computer market? (HP same thing) 


Answer: fat, cocky, lazy, and dividend giving. 

Apple is done, they have zero innovation inhouse, its all outsourced technology, and its stale now- give it 3 yrs and see where their market share is. Apple's time has passed.  Tim cannot recycle 2 yr old processors and screens and expect to dominate, when cheap chinese phones are coming out blowing away the Iphone with specs.  


How many times can mapple get away with lame releases like the last ipad?  

Ohhh ahhh, a new color on the ipad, wow must have....... look they.............- omg!!!!  placed the power button in a new place, 5mm from its old spot, wow apple you guys innovate. Wow a retro teal color.  


Tue, 01/08/2013 - 22:45 | 3134942 Totentänzerlied
Totentänzerlied's picture

The insanity of the Apple Fanboys does not adhere to logic or reason. It is a religion.

Tue, 01/08/2013 - 21:19 | 3134702 yogibear
yogibear's picture

"If this has been in the works for years, as the article suggested"

It was an idea brought forth by the MBA suits and Jobs told them to stick it where the sun don't shine.

Welcome to Dell.

Tue, 01/08/2013 - 18:35 | 3134338 slaughterer
slaughterer's picture

With the iPhone-lite and the self-miniaturization of its product line (no more 17 inch MacBook Pros, ever smaller iPads), AAPL is self-junkifiying itself into Toys'r'Us world, while Samsung is more efficient at beating it to product launches of the high-end (CEC presentation of Samsung smart TV, case in point).  AAPL even has more problems assembling its high-end products as time goes by, and will likely lose more market share in high-end as Google and Samsung attack with more efficient product development systems.  The age of Apple is over.  

Tue, 01/08/2013 - 19:01 | 3134391 TruthInSunshine
TruthInSunshine's picture

Apple plans to implement new strategies to prop up global market share and revenues in the face of stiff competition from the likes of Samsung by fastracking new & exciting products in the developing world with things such as the iBasixFone.

Tue, 01/08/2013 - 21:22 | 3134707 Tijuana Donkey Show
Tijuana Donkey Show's picture

I think that was a M$FT phone. The APPL version of that phone would be Starbucks cups.

Tue, 01/08/2013 - 20:11 | 3134553 Angus McHugepenis
Angus McHugepenis's picture

The age of Apple is over

It never started for me. Did I miss the event?

Tue, 01/08/2013 - 22:46 | 3134944 Totentänzerlied
Totentänzerlied's picture


Tue, 01/08/2013 - 18:40 | 3134354 sessinpo
sessinpo's picture

They may as well Samsung themselves before Samsung does. That is the nature of markets. Apple got their ass kicked not knowing this going against the PC business. It wouldn't surprise me if Apple also has "commoditized" tablets too.

Tue, 01/08/2013 - 21:54 | 3134802 ball-and-chain
ball-and-chain's picture

I've got a Samsung Galaxy Note.

It's beautiful.

I feel like James Kirk of the USS Enterprise.

Beam me up, Scotty.

Tue, 01/08/2013 - 18:27 | 3134309 Ying-Yang
Ying-Yang's picture

Applesauce.... Reggie where art thou?

Tue, 01/08/2013 - 18:29 | 3134316 ar01
ar01's picture

I'd love to see the MSFT/AAPL parallel graph again at some point... 

Tue, 01/08/2013 - 18:30 | 3134318 buzzsaw99
buzzsaw99's picture

love a cheap phone. drop it in the shallows, no biggie.

Tue, 01/08/2013 - 19:04 | 3134418 tickhound
tickhound's picture

Shows APPLE is willing to be the Coke OR the Pepsi.

Tue, 01/08/2013 - 19:23 | 3134456 TuesdayBen
TuesdayBen's picture

Or in the washer in the right jeans pocket. Nnnnnnoooooooooooo!!!!!!!!!

Tue, 01/08/2013 - 18:37 | 3134322 bloostar
bloostar's picture

I go, yugo, Apple go..bye bye. Steve must be scrolling in his i-grave.

Tue, 01/08/2013 - 18:36 | 3134324 NoDebt
NoDebt's picture

Steve Jobs got while the getting was good.  He went out at the top.

Just another gadget maker company watching it's margins erode to their competition without him. 

Steve Ballmer should submit his resume.  He'd be perfect for a post-Jobs Apple.  He's done such an excellent job managing the decline at MS.

Tue, 01/08/2013 - 18:32 | 3134325 pragmatic hobo
pragmatic hobo's picture

to those using smartphones ... what functionality of smartphone, other than sending/receiving voice/text messages, can't you live without?

Tue, 01/08/2013 - 18:33 | 3134329 bloostar
bloostar's picture

You can't eat a Nokia.

Wed, 01/09/2013 - 10:43 | 3136195 jonan
jonan's picture

well played sir

Tue, 01/08/2013 - 18:48 | 3134379 laomei
laomei's picture

Advanced number blocking, VOIP capabilities, better management of contacts, email functionality, GPS with maps that are frequently updating, having a decent camera without having to buy and lug around a camera, full keyboard, etc. etc.  And the ability to upgrade the software and system with tweaks as desired.


The company that extends the basics to home phones eventually.. I guess... will make a killing.

Tue, 01/08/2013 - 22:47 | 3134946 Totentänzerlied
Totentänzerlied's picture

He said "can't live without", not "could and did live without for most of your life and got along just fine, thank you".

Thu, 01/10/2013 - 03:15 | 3139973 laomei
laomei's picture

You can live without internet, and computers, and cars, and indoor plumbing too.  Doesn't change the fact that a little convenience is rather nice.  GPS with mapping services allow for much better travel experiences as well in unfamiliar areas.  Much less likely to be ripped off.

Tue, 01/08/2013 - 18:49 | 3134380 Catullus
Catullus's picture


And my gold/silver price app,

And reading ZH on the crapper.

Tue, 01/08/2013 - 21:26 | 3134718 Tijuana Donkey Show
Tijuana Donkey Show's picture

Right! Reading my Iphone while Ipoo. I try and time the "big push" when I read anything about BennyB, the smell and splashing sound really line up nice with the effect of QE on the economy. I think of TimmahG when I flush, and Obama when I wash my hands of everything.  

Mon, 01/14/2013 - 20:01 | 3152582 Angus McHugepenis
Angus McHugepenis's picture

iPoo... fixed.

Tue, 01/08/2013 - 19:20 | 3134451 inevitablecollapse
inevitablecollapse's picture

i have the entire rockies and east to mississippi in 1:48,000 topo maps and mobile access to ZH to annoy my liberal friends with my daily iteration of 'articles from the crapper', other than that, yeah it's not good for much.  of course, i bought mine before i became semi-enlightened and old habits are hard to break.  plus, i travel a lot so it's nice to see the old lady and little one on facetime...

Tue, 01/08/2013 - 19:28 | 3134463 SilverFish
SilverFish's picture

Porn, on the go.


Usually while driving.

Tue, 01/08/2013 - 21:27 | 3134722 Tijuana Donkey Show
Tijuana Donkey Show's picture

Rub out a solution on the go? Can an Obamaphone do that?

Tue, 01/08/2013 - 21:41 | 3134763 SilverFish
SilverFish's picture

ObamaFone can barely make a phone call.



Really, its just a cat turd with glitter sprinkled on it.

Mon, 01/14/2013 - 19:58 | 3152578 Angus McHugepenis
Angus McHugepenis's picture

I hate cats. Can I get a dog phone that barks when it rings?

Tue, 01/08/2013 - 19:52 | 3134521 Angus McHugepenis
Angus McHugepenis's picture

If I was an APPL customer for several years, I'd be pissed about spending gobs of money for their yearly upgrades only to have them come out with a cheaper version that will do pretty much the same thing as the high end product.

I've been using cheap prepaid throw-away phones for about 10 years. They do almost everything I need at a fraction of the cost compared to signing up for a 3 year plan, etc. The only registration required is to get a new phone number chip set up via customer service. No name, address, or other personal info required. Or simply put your old SIM chip into the new phone and use the same phone number.

Tue, 01/08/2013 - 21:30 | 3134732 Tijuana Donkey Show
Tijuana Donkey Show's picture

They know you have that phone from GPS and voiceprint. In a tiny bit of their defense, APPL does release the updates to the older devices, and mine has been quite sturdy in a case. M$FT, HP, and Dell were fucking people on devices for years, APPL will at least repair them. Try and get any other phone repaired, and tell me how it goes. The yearly updates are for Wall$T, and the hedge hotel. 

Tue, 01/08/2013 - 22:51 | 3134951 Totentänzerlied
Totentänzerlied's picture

No you wouldn't, you'd revel in the pseudojustification for sending Lord Jobs, God of the Universe even more of your money. Like paying church tithes or taxes, there's always a rationalization if you're self-righteous enough and have invested enough of your identity in this or that idiotic brand.

Wed, 01/09/2013 - 03:00 | 3135483 analyzer_66
analyzer_66's picture

i dont use any apple products, but i do have a google smart phone, I own a small business and I send invoices to clients and collect payments when I am away from my desk/office, stuff that i can do quicker from the phone instead of breaking out the laptop and hoping there is wi-fi where I am, the phone gets signal all over and it is not an AT&T plan nor a Verizon Plan phone, I have had it with those two as well.  I can also stream you tube vids in the car and listen to them on my car stereo with the aux cable.  I can check tide info when I am heading out for some fishing.

if you dont like smart phones, then dont get one

if you dont like whats on this channel of TV, change to another

there is only freedom in harness Hobo, choose thy harness

Wed, 01/09/2013 - 03:13 | 3135495 analyzer_66
analyzer_66's picture

i dont use any apple products, but i do have a google smart phone, I own a small business and I send invoices to clients and collect payments when I am away from my desk/office, stuff that i can do quicker from the phone instead of breaking out the laptop and hoping there is wi-fi where I am, the phone gets signal all over and it is not an AT&T plan nor a Verizon Plan phone, I have had it with those two as well.  I can also stream you tube vids in the car and listen to them on my car stereo with the aux cable.  I can check tide info when I am heading out for some fishing.

if you dont like smart phones, then dont get one

if you dont like whats on this channel of TV, change to another

there is only freedom in harness Hobo, choose thy harness

Tue, 01/08/2013 - 18:32 | 3134328 Rainman
Rainman's picture

A cheapie will be very popular in the ghettos and trailer parks. The old geezers will love it too. Bullish, I say...the Obamacheck market is wide open. 

Tue, 01/08/2013 - 18:33 | 3134330 unplugged
unplugged's picture

they've been Motorola'd

Tue, 01/08/2013 - 18:35 | 3134335 Joebloinvestor
Joebloinvestor's picture

They will be traded for votes.

Tue, 01/08/2013 - 18:38 | 3134345 blabam
blabam's picture

Let's see the lines of people for this release lol. 

Tue, 01/08/2013 - 18:37 | 3134347 Euro Monster
Euro Monster's picture

Does this mean moar hobos with iphones?

Tue, 01/08/2013 - 18:38 | 3134349 dirtyfiles
dirtyfiles's picture

I saw that one looks like empty can with string attached ?

Tue, 01/08/2013 - 18:41 | 3134358 booboo
booboo's picture

"We were so poor when we were growing up that all we could afford is the cheap version IPhone, it left such a mark on me"
The stigma will be unbearable so I predict a .gov. Intervention.

Tue, 01/08/2013 - 18:42 | 3134365 Freddie
Freddie's picture

I want a limited edition Titanium ObamaiPhone.

Tue, 01/08/2013 - 21:38 | 3134757 Tijuana Donkey Show
Tijuana Donkey Show's picture

Not from Obama, from Ronald Regan and Carlos Slim. As someone who runs a company who lives off these programs, (for schools) I can speak to this Freddie. Your paying a Universal Access Fee on your phone and Internet bills, and that's where it goes. That, and ATT/Verizon milking schools and libraries for USAC money by the truckload. I'm lucky if I can get my truck up to the dock at all. It's like a tax, but it goes straight to the FCC, with little oversight. Extra-credit, if you want more money from USAC, you need more kids on federal school lunch. What group in schools is growing by 8% a year? Obama is yet to offer something this clever......


Note- This will be the ONLY time I reference anything from Fox "News"

The program, which began in the mid-1980s, has exploded in the past four years after being expanded from supplying landlines to the poor to providing cellular phones. 

Read more:

Tue, 01/08/2013 - 18:44 | 3134371 Grifter
Grifter's picture

The dickheads over at BGR will still tout these as better than the invention of anything ever invented in the history of eternity.  Jesus...I think I just AnAnonymous'ed there for a second...

It'll be interesting what Samsung does with Tizen, if, as they are rumored to be, planning an exit from Android.

Tue, 01/08/2013 - 18:47 | 3134375 css1971
css1971's picture

You can pick up a Nokia Asha smartphone for about $70. How low will AAPL go?

Tue, 01/08/2013 - 18:47 | 3134376 Catullus
Catullus's picture

Because AT&T, Verizon, and Sprint don't want to subsidize the higher end.  And Amazon is dominating the cloud space.

Apple, please go into home automation.  It is your destiny.

Tue, 01/08/2013 - 18:49 | 3134378 kill switch
kill switch's picture

Apple Working On Cheaper, "Commoditized" iPhone


With all that is going on in this fucking insane USA ,,,,I don't give a fuck about Apple, give me a break, I need to rest from this fucking APPLE bullshit..


I-LOVE MYSELF Apple thunder jacket!!!



The kill switch

Tue, 01/08/2013 - 18:52 | 3134389 kito
kito's picture

EVERYBODY GONNA HAVE IBAMA PHONE!!!!!!!!!................................................

Tue, 01/08/2013 - 18:57 | 3134394 Dr. Acula
Dr. Acula's picture

Nobody really buys the iPhone for the hardware. That is largely rivaled by various types of Android phones.

The software is where it's at. I can imagine iOS on cheap hardware could be very competitive with similarly priced Android phones.

>Yet saddest for all those who have watched the progress of this iconic company over the past decade

The saddest part would be having missed out on buttloads of profit.


Tue, 01/08/2013 - 19:25 | 3134447 css1971
css1971's picture

They buy it for the fashion and Apple has had it's day.

This year it's the Samsung, next year it'll be the Nokia.

etc etc.

Tue, 01/08/2013 - 18:56 | 3134396 sandflea
sandflea's picture

Nothing to worry about. "Commoditized" simply means the iPhone has been made intrinsically safe.  It can now be safely used in honey boo boo's bathroom (or the CNBC Green Room), without fear of explosion from noxious fumes.

Tue, 01/08/2013 - 19:00 | 3134407 Dr. Acula
Dr. Acula's picture

What a penetrating analysis! I love how people make jokes and scoff at tens of billions of cash flow.

BTW, Hayek was a clown compared to his teacher, von Mises.


Tue, 01/08/2013 - 19:15 | 3134440 sandflea
sandflea's picture

Tens of billions in worthless paper...

BTW: I agree with your von Mises assessment.  However, Hayek's writings were my first entry into Austrian thought, so I pay him homage with the avatar.  von Mises'  Theory of Money and Credit took considerably more effort to digest than The Road to Serfdom, but I would rather someone first read the latter than the former.

Tue, 01/08/2013 - 19:46 | 3134504 Dr. Acula
Dr. Acula's picture

I recommend Hazlitt's "Economics in One Lesson" for beginners.

von Mises's "Human Action" and "The Ultimate Foundation of Economic Science" are very advanced, but also very awesome.


Tue, 01/08/2013 - 18:57 | 3134399 El Tuco
El Tuco's picture

The best phones were Nokia, plain and simple. You didn't need a user id, you didn't need to sign in, you just used the fucking thing and it played your music, videos, took pictures and let you surfed the web, etc.

You want to do anything on a fucking Iphone or Google phone, better creat an I.D. Itunes account, gmail account, and for Windows a live account. Name, birthday, address, credit card, bank account number, etc.

Fuck'em all, I hope a fucking EMP takes it all down permently. Cocksuckers want us all to be their bitchez.....


Here's hoping APPL and the rest go to ZERO......


Tue, 01/08/2013 - 19:01 | 3134409 Dr. Engali
Dr. Engali's picture

Idiots are going to screw up their upgrade cycle. When a new model comes out you can sell your old one on eBay and recover the cost of the upgrade. People who didn't want a contract would pay for the old model about what it takes to get the new model under contract. Now Apple is going to screw that up. What they need to do is catch up with Samsung with a thinner model and larger screen.

Tue, 01/08/2013 - 19:07 | 3134419 Arbysauce
Arbysauce's picture

The article is weak without analysis of app revenue. That 48% should be broken out into hardware/software. Do developers write apps for iPhone, then port to android or vice versa. I'm sure this is part of Apple's thinking.

Tue, 01/08/2013 - 19:14 | 3134436 Chartist
Chartist's picture

Apple just took its first steps towards becoming the next Nokia.

Tue, 01/08/2013 - 19:28 | 3134464 TuesdayBen
TuesdayBen's picture

I was in a Verizon store the other day fondling some phones that make my iPhone look and feel like an antique.

Tue, 01/08/2013 - 19:29 | 3134466 GrinandBearit
GrinandBearit's picture

Total desperation move.

I still maintain... Apple died when Steve Jobs did.

Wed, 01/09/2013 - 07:05 | 3134468 justsayin2u
justsayin2u's picture

aybe Apple can make the new Obama-phone?  Apples new market.

Tue, 01/08/2013 - 19:30 | 3134470 RECISION
RECISION's picture

Once again, a retarded article by a know-nothing...

Who keeps posting these types of articles???

Do some real research or reading, instead of just recycling shite from 3rd rate hacks.

Tue, 01/08/2013 - 19:31 | 3134471 FedMonger
FedMonger's picture

Since peaking at $705 a share in September Apple has declined for 5 consecutive months.

Apple Chart, 1992-2013

Tue, 01/08/2013 - 19:43 | 3134495 EverythingsSuper
EverythingsSuper's picture

I'm loving my OEM Android 4.1 H7100 knock-off-every-popular-smart-phone from China, Republic of.

Looks great, works great, 160$.


Screw Apple...

Tue, 01/08/2013 - 19:45 | 3134500 orangegeek
orangegeek's picture

Apple needs to build a low priced full featured phone to beat competitors like Android/Samsung or they can kiss their market share and their iphone product line good bye.


They won't figure it out.


Reminds of the days of Compaq - selling well engineered computers - who cares said the market  - make them cheap!!

Tue, 01/08/2013 - 19:55 | 3134525 devo
devo's picture

Cue The Fonz jumping over that shark...

Tue, 01/08/2013 - 19:59 | 3134531 Yellowhoard
Yellowhoard's picture

I think Steve Jobs just vomited in his grave.

Tue, 01/08/2013 - 20:10 | 3134539 I am a Man I am...
I am a Man I am Forty's picture

Making a phone for the masses to gain a shitload of market share, how stupid.  


And if any of you oh so smart BSD's are going short apple prior to earnings please make your call now.  I made my call, buy at the 506 to 510 level.

Tue, 01/08/2013 - 20:10 | 3134552 azzhatter
azzhatter's picture

never even held an iphone

Tue, 01/08/2013 - 20:13 | 3134556 Fix It Again Timmy
Fix It Again Timmy's picture

Well, isn't that special...


Tue, 01/08/2013 - 20:21 | 3134571 Esso
Esso's picture

HAHAHAHA! The Apple iCimmaron.

Good thinkin' fellas, I guess everybody wants in on that bailout action.

Tue, 01/08/2013 - 20:26 | 3134579 riphowardkatz
riphowardkatz's picture

they should call it the 320

Tue, 01/08/2013 - 20:36 | 3134591 Smuckers
Smuckers's picture

Auto makret market fail.


Tue, 01/08/2013 - 20:47 | 3134619 Unwashed
Unwashed's picture

Apple needs to get iOS-run products into entry-level consumers to create lifelong customers.

Consumers sccustomed to an operating system and it's apps will most likely stay with that platform

-even across platforms.

Google changed it's PC search page a few months ago to mirror its page on mobile devices to make the experience on PCs, phones and pads as similar as possible.

Tue, 01/08/2013 - 21:05 | 3134664 Ocean22
Ocean22's picture

))))to those using smartphones ... what functionality of smartphone, other than sending/receiving voice/text messages, can't you live without?(((

Well, for starters, since my iPhone, I never, ever go on a computer. I can do EVERYTHING and much much more with my smart phone. GPS , iPod , text , email , full Internet, banking, camera, video, movie maker, tape recorder ,you tube, notes, calculator, flashlight , games hell, this this thing scrabbles eggs!! Get it? This thing is a computer that fits into my pocket. Sorry apple haters but its awesome!! Could it be better?, yes. Is it good enough right now for 99.9 % of my needs ? Yes.

Tue, 01/08/2013 - 21:11 | 3134682 Miss Expectations
Miss Expectations's picture

Why not add a laser and make it a weapon?

Tue, 01/08/2013 - 21:12 | 3134686 q99x2
q99x2's picture

iJunk iPhone.

Tue, 01/08/2013 - 21:23 | 3134711 yogibear
yogibear's picture

Tim Cook, another MBA suit.

Tue, 01/08/2013 - 22:15 | 3134867 Muppet
Muppet's picture

How much cheaper than free?   Free is what Verizon charges for iPhone 4.  Got one yesterday.  

Tue, 01/08/2013 - 22:37 | 3134918 BGO
BGO's picture

Wallyworld was sellin the iPhone 5 for $129 over xmas. 

Tue, 01/08/2013 - 23:29 | 3135030 balolalo
balolalo's picture

 Everyone get's an iPhone!!!

Bunch of mickey mouse phones made by slaves*, and then sold to fools who would rather pay to watch ads instead of deal with reality around them. 

And the bankers rule the action. 

*using gorwingly scarce metals, using growingly scarce energy, and all the while polluting the planet all along the way.  So we can all chase APPL up?  Grow up and look outside, the clouds are gathering...


Tue, 01/08/2013 - 23:51 | 3135077 hairball48
hairball48's picture

Who's gonna buy all these "devices" when the coming depression hits? Most of these middle income and lower people will be doing well to pay their basics, e.g. mortgage, rent, food, fuel etc. How will earnings look then?

Wed, 01/09/2013 - 00:29 | 3135160 Hook Line and S...
Hook Line and Sphincter's picture

Foxconn will need to open a location in Detroit to make this occur ; )

"Utilizing ebonics for a better margin."

Wed, 01/09/2013 - 02:49 | 3135468 lmile61
lmile61's picture

Apple products are very much costly..if it comes in cheaper cost then that will be much better!!!!! magento development

Wed, 01/09/2013 - 06:32 | 3135686 awakening
awakening's picture

ZH, you have a serial web spammer on your website -

Points for honesty in your profile lmile61 but can you put the marketing job on hold while your around here?
There are plenty of other sites for you to better practice the art of spamming ( without ruining this one.


Wed, 01/09/2013 - 05:15 | 3135641 Occam's Moistur...
Occam's Moisture Strip's picture

Maybe this is a more realistic play for global market share. I'm working in India right now and though everybody here at the office has "mobiles," nobody has iPhones (and they get paid well relative to market). Said they're too expensive.

Wed, 01/09/2013 - 08:03 | 3135762 Sandmann
Sandmann's picture

The price is deliberate to lock Consumers into Credit Agreements to lease phones in The West. It is how the Carriers keep Customers on 24 month contracts

Wed, 01/09/2013 - 07:54 | 3135750 mckee
mckee's picture

Kind of brings the Cadillac Cimarron to mind. That worked out well.

Wed, 01/09/2013 - 08:02 | 3135761 Sandmann
Sandmann's picture

Apple has become SONY. Just as SONY was the OEM manufacturer for Apple in the beginning after it dropped out of calculators and arrived late in personal computers; then lurched into Software by buying Columbia Pictures and putting Guber and Peters in charge before lurching into Record Labels to complete the decline of hardware and then watch Samsung and LG take the flat-LCD display market from them, so Apple is doing the same.

For iPod read Walkman. For iPhone read iPod telephone. For iTunes read Software to lock in and drive hardware so we avoid the VHS encirclement of Betamax by signing up film studios. Then look at focus on Design, Visual Imagery, Luxury Branding, Proprietary Carrier for Software/Data. Then watch the Decline. Inebriated with 1980s cheap money and growth SONY emerged with a bigger Audio-Visual Division than Panasonic and went mad building factories everywhere to compete in every price segment. Having seen SONY enter Europe as a premium product line sold through quality retailers I laughed to hear a woman customer years later ask a salesman if Sony was really Sanyo.

SONY destroyed its brand by trying to be everything to everyone and losing the margin it needed for innovation and short product life-cycles. In the end each model change was a face-lift not an innovation and now it has no real prospects in TVs or in Monitors nor in Laptops and has outsourced so much. APPLE is simply going the way of SONY


Wed, 01/09/2013 - 08:49 | 3135809 Fizzywig
Fizzywig's picture

" a world, in which the end consumer has increasingly less disposable income"


The most important statement in the article; another example.

Wed, 01/09/2013 - 09:52 | 3135990 F-X
F-X's picture

I got my current iPhone only because it was the cheapest thing on the market. In fact, it was free. My phone provider offered me a free iPhone if I would sign another 2-year contact at US20 per month. Well I'd been with them for 12 years, so they didn't have to offer me anything. They must have got a hell of a deal from Apple to give them away for basically no reason. 

Wed, 01/09/2013 - 13:56 | 3137072 Denninger-is-a-...
Denninger-is-a-douche's picture

It's just a muthafuckin phone - go do something productive and for fuck sake please don't procreate.

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