A couple of days ago I put down my thoughts as to why the 3GS might remain on Apple’s line up and it primarily hinges on the fact that Apple cannot offer the iPhone 4 for less than $350 let alone $300. As it turns out, Aircel in India has begun to offer the 3GS unlocked for $236 including a $55 one year post paid voice, text, and data package. The catch is that the data package is 2G only, but that’s beside the point. You can take the iPhone out of India and it will work with any SIM card anywhere, for far less than $300, the price point I put forward in that earlier blog post.
This could be Aircel trying to clear inventory, but knowing some details as to how Apple deals with carriers, this promo would not have gone ahead without Apple’s authorization unless Aircel is willing to face severe penalties.
You see, Apple sets the price that iPhones are sold around the world. Any marketing material, any promo, billboard placements, advertisements, and the like must all receive a green light from Apple, otherwise the carrier partner will be penalized. It happened before with Telkomsel in Indonesia when it launched an ad campaign ahead of the iPhone 4 launch at the end of 2010.
Apparently the telco had gone with the campaign before Apple approved the material and as a result, its head of marketing for iPhone was recalled back to parent company Singtel, and Telkomsel had difficulties acquiring more iPhone 4 from Apple in early 2011 as it faced shortages.
The importance of the 3GS being maintained in price-sensitive markets is that it allows Apple to offer a low cost iPhone to a far greater range of consumers who might otherwise consider the more affordable Android or BlackBerry phones.
Apple faces difficulties in selling iPhones in emerging markets where consumers are used to paying full price for phones instead of agreeing to contracts that subsidizes the up front cost of the phone. Having the 3GS in that lower price range will remove or at least reduce that challenge and puts the iPhone within reach.
The 3GS may be a three year old phone, but it’s still an iPhone and it still runs the latest operating system and will run much of the same apps as the newer models. After all, most of the Android and BlackBerry phones within that price range may be brand new models but they are not exactly state of the art phones either.
Matthew Panzarino for TheNextWeb
The iPhone ‘next’ would be the flagship, the iPhone 4S would offer Siri and take the place of the 4 in the pricing lineup, and the 3GS would remain ‘free’ on contract. But, if the prices were right, Apple could expand the 3GS from a contract device to an off-contract pre-paid model that might finally give the company a horse in the developing nations race.
The iPhone business is still an evolving one for Apple. It may be their largest money maker already right now but they can still tweak this into something bigger as the prepaid and emerging markets are still a little bit beyond the iPhone.
Apple used to sell one model iPhone, now they sell three, two of which are identical. When Apple introduces the next iPhone, it could drop the 3GS off for being too old or it could decide that having two identical phones is confusing and kill off iPhone 4.
Having the 3GS and 4S alongside the upcoming model makes sense to me because the three models are different enough to be aimed at different market segments, similar to how the iPod line up has different models for different markets and purposes.
The 3GS could be the low cost iPhone primarily aimed at prepaid or emerging markets in which consumers buy phones outright with no carrier subsidies. The phone currently costs around $400-450 outright. If Apple can drop that even further, it would be a boon in emerging markets as well as among the lower income bracket.
The 3GS has allowed Apple to enter the lower price range without having to create another phone specifically for that purpose. Thanks to the decision to include the 3GS in iOS 6 deployment, the phone will remain current at least until 2013. Buyers of the 3GS won’t feel too left out as it will still carry many of the features available to the newer iPhones.
The 3GS may be free with a two year contract in the US, but in markets with no carrier contracts, it’s far from free. If Apple can offer it for $300 or less, it would sway a lot of buyers who may otherwise go for Android, Windows Phone, or even BlackBerry.
The 3GS would still be competitive against the midrange Samsung and HTC phones and the lure of iMessage, Line, and WhatsApp would go some way to keep BlackBerry at bay.
The iPhone 4S essentially is an upgrade to the iPhone 4 so I’d rather see the iPhone 4 killed off than the 3GS. The 4S can be the mid-range phone that offers most of the features in iOS 6, limited in hardware features due to the technical inferiority compared to the upcoming iPhone.
The iPhone 4 of course offers more than the 3GS but why go with 4 when the 4S offers much of the same but better? The 3GS would cost less to manufacture too which means it would be more affordable to consumers. Both 3GS and 4 also do not have Siri. Rather than have a phone that looks similar but has fewer features, might as well go with the one that actually looks different.
These technical barriers are why it makes sense to have the iPhone 4 killed off instead of the 3GS. The 3GS is distinct enough to be a different iPhone yet still offer many of the features in iOS 6. The average consumer would immediately know the difference and understand why certain hardware oriented features like video calling, 3D mapping, built-in turn by turn navigation, and Siri aren’t available on their iPhone.
The 3GS is also less likely to break or shatter when dropped from a height of three feet or so. For a low cost phone, that resilience is more important compared to the more expensive phones since people are more likely to buy cases for those.
On top of that, it’s unlikely for Apple to offer the iPhone 4 outright for $350 or less. And this is probably the biggest reason for Apple to stick with iPhone 3GS instead of iPhone 4.
[Update] Alternatively, what John Gruber said. 3GS goes cheap for markets outside of the USA and iPhone 4 takes 3GS’s place as the “free” phone on US carriers. This might complicate matters a little bit in International markets though.
When my phone was stolen in SF last year, they immediately powered it down to stop Find My iPhone. Settings idea: “Shutdown Requires PIN”?— Cabel Maxﬁeld Sasser (@Cabel) June 17, 2012
A novel idea which is completely implementable as an option for those who wish for more security. Lost two iPhones last year which could have been recovered had this been an option.
If you install an iOS beta on your primary iPhone, you’re not allowed to complain on Twitter about bugs.— Evan Doll (@edog1203) June 12, 2012
He has his reasons and if you know the follow up to 1984, which was called Lemmings, it rings even more true to his criticism and remarks about Apple being shunned by the enterprise market. Lemmings carried a much stronger message than 1984 and because of it, it fell flat. It was a disaster.
The article though, resonated with me not because of his criticism of the ad but for how Apple handled the iPhone 4 antenna issue. It never was bigger than most other problems with the phone but due to the media beat up, it felt worse. As it turned out, within 10 days the issue disappeared. Apple did redesign the antenna for the 4S but to me it had always felt like Apple was doing it more for the public relations effect than for strictly technical reasons.
Oh and it’s yet another claim over the inaccuracies of Walter Isaacson’s book on Steve Jobs.
Samsung Mobile USA put up a video this week showing several tasks that supposedly the iPhone can’t do but can be easily done on a big ass 5-inch Galaxy note with a stylus. A STYLUS! How 1994.
Of course, when Tap Magazine found out about it, they went to work on rebutting every point in the video by doing everything it said the iPhone can’t do, on an iPhone. Including shooting and editing the video.
Tim Bajarin for Time:
Indeed, it’s pretty clear to me that Apple has just scratched the surface of the role Siri will play for them in driving future revenue. At the moment, we are enamored with its ability to enhance the man-machine interface. But that’s just the start. Siri is actually on track to become the first point of entrance to “search” engines of all types tied to major databases throughout the world. It will become the gatekeeper to all types of searches, and in the end control which search engine it goes to for its answers.
Apple may not have to compete directly with Google and Microsoft on the search engine front to be a force in search. With Siri, Apple gets to be the gatekeeper to the hundreds of specialist search engines if it manages to pull off deals with databases such as Craigslist, OpenTable, Apartment Finder, AirBnB, Edmunds, IMDB, and the like.
The key to this is being able to pull off the deals. Right now, Siri works with Yelp and Wolfram Alpha. Many (but not all) of those database or search sites make money off display advertising, which will be completely bypassed by Siri users. To have Siri scour their databases and deliver the results directly to users would undermine the very lifeline of their existence.
Not all of those sites will agree to what Apple may propose but Apple could do two things; buy out enough range of specialist search sites to further legitimize Siri, or convince them that Siri will eventually be the preferred way for millions and millions of people around the world to look for information that they will bypass websites and search apps anyway, thereby depriving the sites of visitors. Apple could say that turning down Siri would mean turning away customers.
If Apple were any other company, it might tack on iAds on Siri but at the moment, it doesn’t seem likely. Perhaps one could think of Siri as iTunes, a unified place to seek out relevant bits of information from many different sources. Of course, the business model would be different. People wouldn’t pay for premium search options, or would they?
Ever thought of Siri operating in a similar way to a cable TV service offering a multitude of subscription packages of search databases with a free basic set? Might have crossed the minds of people in Cupertino but given how iTunes is there to disrupt that very business model, it might seem unlikely for Apple to adopt it, not to mention putting people off.
Siri might not be fully working around the world at the moment and whether Apple will earn revenue out of it remains to be seen, after all, Siri is still in public beta and it might take Apple a while before it’s ready for a proper roll out.
It’s a bit difficult to imagine Apple allowing the next iPhone to be released while still carrying a beta version of Siri.
[update] Or Apple could add ability to purchase things online from Siri.
Who would want to buy them? Apparently Singapore’s national servicemen. The military has guidelines regarding electronic devices and that includes the restriction on camera-equipped gadgets. Seems that it is often the case that military personnel would use one phone for personal use and another during active duty.
Taking out the camera from the iPhone clearly is an unsanctioned modification and as it happens, will void the warranty although it is likely that the telcos who modify the phone may be required to foot the bill on service requests, depending on how Singapore’s consumer protection laws work.
Since the camera is one of the iPhone’s most significant highlight, it makes no sense why anyone would want to buy a camera-less iPhone regardless of military regulation. If anything, these servicemen who may already have an iPhone since half the country apparently does already, or those looking to buy one, could just buy another phone that has no camera.
There are plenty of camera-less phone in the market and it would be much less costly than having to buy two iPhones or even just one “blind” iPhone. With a two year contract, the 64GB model supposedly will go for S$900 (US$700). A basic phone would fetch for S$50-$70 and switching SIM cards between the phones, if you don’t want to keep two numbers, isn’t that complicated.
This reminds me of the tall tale of the NASA pen, which, although humorous, was mostly false.
you do not have to manage background tasks on iOS. The system handles almost every case for you and well written audio, GPS, VOIP, Newsstand and accessory apps will handle the rest.
There is almost absolutely zero need to manually kill the apps listed in iOS’s multitasking bar as it’s not a list of active apps but a list of recently used apps. It’s no different than if you had opened your browser and go to the history list. Apps listed there are not active. A few exceptions to this case of course exists such as when an app hangs but it doesn’t mean you have to clear the bar every time. It’s not like you clear your browser history regularly do you?
The blog post is not a particularly long one, but for the short-attention span crowd, go straight to the summary section.
Even the Geniuses at Apple’s Genius Bars still get this wrong.