Another Cheap Apple Product Rumor

February 11th, 2009

So only a few weeks ago, Apple COO (and acting CEO) Tim Cook announced that it’s not in Apple’s DNA to build cheap junk. But that’s nothing new, as he and Steve Jobs have been saying the very same thing for an awfully long time. You’d think that some folks would get the message.

Despite such claims to the contrary, however, some tech and financial pundits just won’t give up. To them, Apple is missing the boat not building cheap Macs, or a cheap whatever-it-is at the moment.

Oh yes, there is a cheap iPod out there, the shuffle, but a music player, aside from the software, is pretty inexpensive to make, so there’s nothing lost here. In fact, you can probably credit the shuffle with saving iPod sales this past holiday quarter. At a starting price of just $49, it is a sufficiently casual purchase to attract even those on a tight budget.

Just the other day, I was busy reminding them that Apple is not going to jump into the netbook space in the same way as other computer makers. If they choose to get involved, you won’t see a stripped-down MacBook or yesterday’s model regurgitated in a cheaper package. How could they expect otherwise?

When it comes to the iPhone, the critics don’t seem to understand that Apple isn’t trying to emulate Nokia or Motorola and build 25 different variations on a theme, covering all price points and styles. Indeed, in this particular economic climate, the traditional cell phone makers aren’t even doing all that well, so why imitate failure?

Apple has prospered by carefully picking and choosing just the right market segments to enter — at least for them. So while it may seem sensible to have a $99 iPhone, the question is what form should it take, and is there any sense in producing such a product?

Now let’s not forget that the price of the iPhone has already been cut twice. The second time takes advantage of the subsidy payments from the wireless carriers to provide a starting price of $199. But the trip to $99 is no vast gulf. As the price of Flash memory chips declines, and Apple continues to ramp up production, it may indeed be possible to deliver today’s iPhone 3G at that price level without any sacrifices whatever.

I can’t say when that might happen, but don’t be surprised if the next generation model either costs the same for more memory and features, or costs less with configurations similar to today’s models. That way Apple can deliver on the promise of a low-cost phone without having to design a cheaper product.

Besides, what would that alleged iPod nano offer? Would it have a smaller screen? Really? Consider the limitations of the current screen in navigating Web pages. Now imagine if the screen size were, well, one third less. It wouldn’t help to pack more pixels into the smaller space. Even our younger readers would need visual aid then.

If Apple ditches the same sort of screen, they begin to end up with something that’s no better than the standard, garden-variety mobile phone with a few frills. And remember that being a wireless phone is perhaps but a small part of what the iPhone does. It’s actually a tiny personal computer that packs in many of the functions of its larger siblings. As Apple — we all hope — adds true editing features, such as cut, copy and paste, I rather suspect that some people may not actually need a Mac or PC.

That may seem beyond comprehension, but consider the person who does little more than check email, write short messages and maybe browse a few sites on a regular basis. In that sort of environment, anything more powerful than an iPhone would be overkill and perhaps a waste of money.

That is no doubt the attraction of the netbook, other than the cheap price of course.

In any case, don’t expect to see an iPod nano this year or any year. Sure, Apple is no doubt going to expand its iPhone product line in some fashion. I wouldn’t hazard a guess whether they will move the line upscale and perhaps deliver a Pro version as their answer to the netbook. It may indeed be possible to produce slightly smaller version actor too, but consider the limitations.

And please ignore the lame suggestions the media pundits make about what Apple is about to do. While I expect to be surprised, amazed, and more often than not completely wrong, I don’t think Apple is going to abandon simple common sense. Do you?

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