Ever since Apple Inc. developed and released the first iPhone in June of 2007, the California-based technology giant has been at the cutting edge of advances in smartphone technology. If Apple isn’t actually driving the vehicle of change and creativity in the industry, the fear that they’ll come out with something bigger and better drives others to try and innovate as quickly and effectively as Apple. That Apple remained at the top of the industry for as long as it did was no small feat. While competing Android devices were available in several models from various manufacturers (Samsung, HTC, LG), the iPhone is the only Apple iOS powered smartphone available. As of the end of 2012, Android had finally established itself firmly in the driver seat in the industry by capturing 75% of the mobile market compared to a dwindling 20% for Apple’s iOS.
Diversity alone was not the entire reason behind Apple’s fall from the top. The iPhone isn’t exactly priced competitively, in part because Apple knows that hardcore iPhone fans will come back again and again for new generations of the device. Each new generation iPhone is priced at $199 with a two-year contract on various carriers and stays at that lofty price until a new generation comes out.
Android devices on the other hand generally cost between $0 and $99 with a new contract and deals are frequently offered to get top models for half their starting price, particularly around the holidays. These aren’t subpar devices either. Many of them match or exceed the hardware specifications and performance of each iPhone.
Now it is rumored that Apple is considering the production of a new, cheaper iPhone to try and recapture some of the market. Rather than the metal, glass, and/or aluminum enclosures that iPhone users have been accustomed to from the beginning, the new device is rumored to be constructed out of a plastic body. Reports vary on the subject with some sources stating an all plastic casing would be used, while others say it is more likely this new handset would be a combination of metal and see-through plastic.
Apple would be able to offer the device at a lower price than it typically sets for iPhones for two reasons. The switch to plastic is not only a cheaper alternative to metal and glass casings, but the move would also allow the company to use U.S. based suppliers to secure the parts and manufacture the phones at home.
Whatever the case, it would mark the first time that Apple has developed different models within the iPhone lineup. The new device would be considered an entry-level handset and while it might not match the exact specifications and performance of original iPhones, it would no doubt match the requirements and specifications of other entry-level devices running on Android and Windows 8.
Apple’s Senior Vice President of Worldwide Marketing, Phil Schiller, recently told a Chinese newspaper that the rumors of a cheaper iPhone are not true. Schiller steadfastly insisted that Apple would never produce a smartphone that didn’t feature the best technology available. He pointed to the company’s consistent use of unibody designs, the new Retina display, and even quality product pipelines as an indication that Apple has no desire to produce a cheaper smartphone.
There are two problems with this denial however. First off, Schiller’s comments leave room for interpretation. He clearly stated the company would not produce -cheap smartphones.- Cheap is often associated with second-tier or inferior products, when in reality it can mean a less-expensive alternative for consumers as well.
Secondly, given Apple’s dip in market share and waning demand for the iPhone 5, it might not be a bad time for Apple to diversify its line to win back some customers with the strong performance of the iOS system at a price that is affordable to more consumers.