Smaller, Cheaper iPhones for the Rabble

If you couldn’t afford to pay $300 (with two-year contract) for a spanking new 32GB iPhone 4, there could still be some hope for all ye starving but salivating desperadoes.

There’s considerable buzz lately that Apple will launch new models of its wildly successful smartphone at about half the size of the current iPhone 4.

And, the new iPhones could even end up being free to you (subsidized, of course, by the carriers in exchange for a lucrative two-year servitude contract).

The prototype  of the new iPhone is described as a thinner model with an edge-to-edge screen that’s touch capable and packs a virtual keyboard (Source: WSJ).

No word yet on when the devices will hit the market but we predict that it should happen around June-July, the time when Apple usually refreshes its iPhones.

Although Apple has sold over 84 million iPhones since those nifty gadgets debuted in 2007, they account for a mere 3.4% of mobile phone sales in 2010.

Price, obviously, has been a major deterrent in higher sales of iPhones because the rabble in the U.S. is conditioned to getting a free phone every two years from their mobile carriers.

The thought of paying $200 or $300 for a cellphone is nothing short of sacrilege to millions of subscribers even if the phone is a cool one like the iPhone.

Also, with unemployment and job insecurity at record highs in the U.S. how many can afford to plonk down $200 or $300 on an iPhone.

And this is the yearning-for-an-iPhone-but-can’t-afford-one market that Apple wants to address now having already conquered  the high-end early adopters over the last three years and eight months.

The cheaper iPhone could also address the latent demand from yuppies in fast-growing economies like India and China that crave the device but lack the moolah for it. Unlike in the U.S., the mobile phone is not subsidized in a lot of countries. Spending Rs 35,000 for a mobile phone is not within the reach of most Indians even if the economy is growing at a scorching 8%.

Further, Apple is also under strong pressure from Google’s Android software based smartphones that are often cheaper and reportedly offer many of the same features in the iPhone (minus, of course, the integration with Apple’s digital media story iTunes). Plus, with HP gearing up to launch new WebOS-based smartphones in the coming months and Nokia’s recent deal with Microsoft it’s safe to say that Apple has little choice but to go downmarket.

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