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Apple Will Only Release a Cheaper iPhone if it Had “Category Killer Experience”

If you have been following the news with regards to Apple's next big hit smartphone, the iPhone 5, then you should know that rumors about this soon to be "killer" handset are pretty much everywhere. Pretty much every aspect of the iPhone 5 have been rumored, speculated and predicted already. But probably one of the most interesting one is that Apple is allegedly planning to release not one but two iPhones this year. One will be the direct successor to the highly successful iPhone 4 while the other is a handset similar to the iPhone 4 but will be much cheaper and will be targeted towards individuals with less budget and developing countries.

Low End iPhone 4
Now according to RBC Capital Markets analyst Mike Abramsky, the fruit company will only release a low-end iPhone if it can fulfill one major prerequisite: that is if the handset can provide an "innovative, category-killer experience."

Abramsky revealed this information after a meeting with Apple's two top executives, COO Tim Cook and CFO Peter Oppenheimer back in Wednesday. Abramsky did not provide any direct quote from the two executives but he said, "Apple’s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience." If anyone can recall, the only time that Apple COO Tim Cook commented on this particular issue is when he said that the iPhone is "not just for the rich" which one only assume that the Cupertino giant is planning to release a lower-end iPhone.

So what does it mean to have an innovative, category-killer experience for the iPhone? According to Abramsky, the market for low-end smartphones have been flooded with cheap Android smartphones which can be quite an attractive market. This particular “explosion of low-priced Android smartphones” have grabbed the attention of Apple who's willing to go head-to-head with the competition with their "sustained advantages" over Google's platform.

Despite the expected explosion of low-priced Android smartphones – detrimental to Nokia, RIM, others – Apple believes a) its integrated approach to hardware/software, b) oversight of user experience (including its ruthlessness about taking things out, and c) application ecosystem “curation” will sustain its competitive advantages and premium positioning.

iPhone 4S
Whether Apple is ready or not to take on the prepaid market, one can't deny that it would be a sensible move for the company if it really wants to considerably expand their market. According to Abramsky, Apple executives have also affirmed the "untapped global opportunity" which could only mean countries like China, Latin America, the Middle East and India. There have been reports that Apple is preparing to launch a cheaper version of the iPhone 4 on China Mobile, the world's largest carrier. A low-end iPhone would certainly be instrumental in tapping China's huge prepaid market.

The analyst also added that Apple is readying the iCloud for "significant scale" citing that the company had already learned from their previous online offering, the MobileMe service.

The iPhone 5 is expected to launch by the end of September or at least it should have been announced by then. There has been a significant amount of hype surrounding its release and it only grows as its expected release date draws to a close. If Apple indeed releases a low-end iPhone, then it has a potential to be a game changer. It is hard to deny that one of the biggest reasons why pre-paid users are reluctant to buy an iPhone is due to the cost. But with low-end iPhones being available, what's stopping them to buy finally get their hands on Apple's handset? Well that's assuming of course, that they actually want it.

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