Apple may unveil early next month an inexpensive iPhone that could “drastically expand” the tech giant’s smartphone market – along with providing a huge 50 percent margin. The iPhone 4s, described as an iPod touch with a cellular antenna, could sell for $300, yet cost just $150 to build, claims one Wall Street analyst Monday.
Although Apple hasn’t commented on its plans, Deutsche Bank’s Chris Whitmore writes the iPhone 4S would be Apple’s entry into the profitable prepaid market, giving the Cupertino, Calif. company access to 1 billion additional customers. He expects the device to follow the footprint of an 8GB iPod touch, which as a 38 percent margin.
Whitmore also writes Apple’s fifth-generation iPhone, often referred to as the “iPhone 5”, will include aluminum unibody construction, replacing the iPhone 4’s glass, plus offer a larger screen and better camera. The unibody construction could reduce the new handset’s weight while the larger screen would fit a growing trend by smartphone makers.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
35 responses to “Analyst: The iPhone 4S Will Be An iPod Touch With A Cellular Antenna, And It Will Be Huge”
The analyst seems to take most of his info from this post http://9to5mac.com/2011/07/07/…
An iPhone is just an iPod touch with cell service. Not much of a revelation….
If the “iPhone 4S” is going to be an “iPod touch with a cellular antenna” then it won’t be an iPhone will it? Therefore it makes no sense to talk about it as the “iPhone 4S.” It’s an iPod touch.
This is the goofiest climb down I’ve yet heard.
I’ll be switching back to android
I’ve been blowing this horn for a long, LONG time. If this happens, it’s a brilliant move by Apple. Simply throwing a cellular antenna into an iPod Touch does several things.
(a) It allows Apple to sell direct to the consumer, bypassing profit sharing with its partners. Apple LOVES large margins, and this could do a lot to increase those.
(b) It addresses a section of the market that no one in the industry has given any credence to: the “dumb” phone market. This market still makes up more than half of all cell phone users, and if Apple introduced a semi-smart phone that they could use without incurring data charges or committing to a contract, they’d collectively drop their ancient Razrs and lunge for the chance.
(c) It brings continuity to the iOS line. No one has really considered the smart phone customer who doesn’t want a data plan (I’m one of them – I’m near a wifi connection 90% of the time, and don’t want to pay for another way to use pipes I’m already near the majority of the time). Apple is already considering them with 3G and Wifi versions of the iPad. This just brings that option to the iPhone too.
(d) It allows Apple to gracefully begin the phasing out of the iPod Touch by introducing this new iPhone 4s as a direct replacement to that. All of the benefits of an iPod Touch, with phone calling capabilities thrown in. Essentially, instead of an iPhone downgrade, it’s an iPod Touch UPgrade.
I’ve wasted enough of your time. Suffice to say that if Apple announces this, I’ll be first in line, and there will be a line for blocks and blocks behind me.
if there is a “4S” coming out, it will be the exact same form factor as the 4……. no questions.
If the concept in this article is true this IS the iPhone 5….
I’m putting my money on a 3G iPod Touch. It’ll be a true game changer.
I don’t understand how that tells us anything useful. Aren’t iPhones and iPod Touches basically the same except the iPhone has a cellular antenna and the touch does not? In that case how is this anything different than the iPhone 4 and whatever iPod touch was released around the time of the iPhone 4? I can understand discontinuing the touch and allowing people to buy the iPhone and just not enable the cellular antenna unless they want it. Is that what this means?
I’m totally with you on this, MacGoo!
Doesn’t this mean that I could buy a iPod Touch 3G and not sign up with a carrier? Then I could use Skype or some other VOIP app. Isn’t this the appeal of an iPod Touch with Cellular?
Tim Cook: Here’s my magic. We put in this antenna into the ipod… And walla! Now u can make phone calls on ur iPod!! Ladies and gentlemen, i present u- The iPhone … Wait, whaaa!? Steve jobs already did that?
It is all about component cost and margins. The base iPod costs about $150 to make and sells for $229. If they can sell an unlocked phone for basically the same price or even get it down to $199 while maintaining profit margins, it is a big win for Apple. It would make the phone a lot more available.
When you buy the iPhone 4 for $199.00 from a carrier, they subsidize the other $450 dollars of the cost of the phone. Apple still gets the same amount of money and the carrier makes up the money in the back end. However a phone that costs $649.00 unlocked isn’t going to do well in markets where pre-paid unlocked phones are the norm over carrier subsidized phones. In places like Europe and North America, people will predominantly purchase the carrier phone. In places like Asia, India and the Middle East, the pre-paid package is more dominant.
The cost of the iPod is cheaper because it uses components that are older than the ones in the iPhone and therefore cheaper to obtain and manufacture. Such an iPhone 4S as described in this article wouldn’t have an A5 Dual-Core Processor or 1 GB of RAM. It would use the lower cost A4 or even the Cortex-A8 processor found in the 3GS. It would have the lower quality 5 megapixel camera as well. All components that are very inexpensive to purchase in 10,000 quantity lots.
Obviously, I would need a 3G provider but I wouldn’t need phone service. Like the iPad 3G.
If they do that, then I would not buy iPhone 5. Apple is smarter than this.
Interesting prediction. Who would think anyone from a bank could be wrong?
If you ever need a new journalist you can always contact me.
Won’t happen, sorry.
Won’t happen, sorry.