Apple has never been afraid to disrupt itself, and as the mass of budget iPhone rumors piles up, a picture of a device that will cannibalize existing iPhone sales but help guarantee Apple’s future is starting to emerge.
First, the rumors: The following video, produced as an advertisement for an Android-based clone of the forthcoming budget iPhone could be fake. Even if it is, it’s such a perfect distillation of what’s been bouncing around the sites that publish Apple leaks for months that it succeeds as a mockup of the (still rumored) budget iPhone.
Here’s what’s important to know about this new iPhone: According to the rumors, it will have a plastic case, a 4″ screen just like the iPhone 5, and it will probably cost half as much as the iPhone 5, or about $330 before any subsidy from your carrier. Given those specs, it will necessarily involve some compromises. For example, it’s likely to have essentially the same innards as the iPhone 4S (but with a bigger screen).
But here’s what all those specifications won’t tell you: As an increasingly mature category of device, smartphone hardware matters less than ever. Of course smartphone makers are going to continue to invent new features that demand the newest hardware, because it’s the only way to keep consumers on the endless treadmill of updating their phones. But the fact is that in terms of the functionality that most consumers need, the difference between successive generations of iPhones continues to shrink. If the rumors are true that the budget iPhone will have the same size screen as the iPhone 5, people’s tendency to opt for older iPhone models could be even more true for this generation of iPhones. Sure, the budget iPhone won’t be as fast with high-end games, and maybe Siri’s voice recognition won’t be as responsive, but these are not things that matter to an overwhelming majority of users. That’s one reason that older iPhone models are more popular than ever.
What does matter to consumers, especially outside the US, where phones are less likely to be subsidized by carriers, is price. Apple knows it’s competing with ever-cheaper Android devices with comparable abilities. Apple still has the advantage of the high quality of apps in its app store. But it faces a long-term erosion of that advantage if Android continues to gain a greater share of the world’s smartphone users and app makers prioritize developing for Android as a result. And now that US consumers have the same option as their peers elsewhere, to save money on their iPhone by buying it outright, the $300 difference between a budget iPhone and the latest model could be meaningful stateside as well.
Another thing that matters to consumers is durability. Ironically, this could be one area where the metal-and-glass iPhone 5 (and presumably its successor) could have an advantage over the budget iPhone: tests by SquareTrade found that the iPhone 5 was more durable than the Samsung Galaxy S4, which has a plastic case like the budget iPhone is expected to have.