With the hype continuing to build around the launch of the
I never gave this specific idea for another iPhone much credence for a number of reasons. The Apple Watch, much like the parent iPhone, is not aiming at a high-volume low-margin business model of smartwatch contenders such as the Pebble, it is looking to capture the fashion/luxury market who are willing to spend significant amounts of money on a watch. Why would that message be paired up with the idea of a budget handset?
More to the point, why would Apple move into the 'budget handset' market? The idea of constructing a lower priced smartphone to gain significant market share against Android has been looked at time and again and Apple has never gone down that route. It is not about high volume to Tim Cook's company, it is about high margins, high price, and high status.
The geekerati have been down this route before many times, especially in the run up to the launch of the Apple 5C. In those heady days, the argument was Apple needed a cheaper iPhone to gain a foothold in China and be ready to sell to 'the next billion'. It would use cheaper components, it would have a plastic chassis and outer case, and be aggressively priced.
(Read more about why Apple retained the iPhone 5C during 2014).
Instead, Apple was looking at a different strategy. If tradition had been followed, in September 2013 the iPhone 4 would have left the line up, the iPhone 4S would become the entry-level handset the iPhone 5 moved down to the middle tier, and a new handset would slot in at the top.
That new handset would be the iPhone 5S. The iPhone 4S did take over at the base, but in the middle Apple played a smart marketing move. Rather than be sold as a one-year old handset with a discount, the iPhone 5 was cancelled, and replaced with the iPhone 5C - a handset with almost similar specifications, but a lower bill of materials due to the colored polycarbonate replacing the metal chassis. It took over the 'middle' price tier and provided Apple with an increased profit margin for that space compared to previous models.
It might not have been the budget iPhone that analysts were clamouring for, but it did become one of the most popular iPhones ever sold.
(Now read how Tim Cook defused Steve Jobs' thermonuclear war before taking down Android).
So with speculation around another budget iPhone starting to rise, I'm looking at Apple's thinking behind the iPhone 5C and wondering what could be the case this time. I think that any iPhone range changes will be left until September, and while I wouldn't expect any radical changes to the pricing structures or value, the iPhone 5C is currently sitting on the bottom rung of the ladder with a rather pathetic 8 GB of internal storage.
I assume the iPhone 5C is going to fall away, which means the lower tier is set to be occupied by the iPhone 5S. I would speculate that Apple is about to pull another 'almost substitution' on the iPhone 5S, just as it did to the iPhone 5.
While the iPhone 5S does have TouchID, it does not have the hardware to support Apple Pay, and Cupertino is putting a huge amount of focus on mobile payments. If I was Tim Cook I would want all of my handsets to be Apple Pay compatible., That would require some re-engineering on the 5S.
(Read more about iOS 9 and its focus on Apple Pay).
Couple that required re-engineering with the loss of the colored polycarbonate styling of the iPhone 5C, add in the continued demand for the smaller four-inch screened smartphone, and the answer is a reworked iPhone 5S with Apple Pay support added into a polycarbonate-based four-inch handset.
Arguably this would be seen as a 'new' handset rather than a discounted older handset, and that approach makes it an easier sale on the high street by Apple Store staff, carriers, and third-party resellers. It just needs a name to tie it into the 'new' Apple ecosystem that differentiates it from the existing handsets and evokes a strong reaction in consumers.
How does the iPhone 6C sound to you?
