The Halfway Phone

My second foray into the world of Apple speculation. In my first, which I titled Apple’s Wildcard, I spoke to the possibility of Tim Cook announcing an iPone 6 and budget iPhone this fall: while I consider neither particularly likely, leaning more towards an iPhone 5S as the continuation of Apple’s apparent tick-tock cycle and disappointment for those waiting on a budget iPhone, I hedged my bets with Tim Cook’s “Can’t innovate, my ass” comment. Since writing that piece though the budget iPhone has remained a surprisingly popular topic, and thus something I feel I should readdress.

Not to rehash my entire article, but in Apple’s Wildcard I cited a lack of market for a cheaper iPhone as one of the main reasons those waiting for it would once again find only disappointment when Tim Cook walked off the stage this fall. I pointed to the iPod Touch as the device meant for those desiring an iPhone-like experience without the contract, and the now free with contract iPhone 4 as the phone for everyone else unwilling to purchase the latest and greatest model. Between those two devices, I reasoned, no middle ground existed: there was effectively no market for a cheap iPhone not addressed by these two offerings, and thus no way Apple would build such a device.

Unfortunately, I made an egregious error: I ignored the entire Android handset market, the people who desire more than a flip phone, cannot or will not purchase the newest offering from Apple, and refuse to settle for the carrier’s free with contract iPhone. I ignored the entire market Samsung in particular caters to, the addressable market for a budget iPhone. Despite having realized my mistake though, I still hold out hope that Apple will forgo entering this market. Even now, when not a day goes by without a new article heralding the release of a plastic iPhone, I stand by my original sentiment in principle: Apple should not enter this market.

By definition, a cheaper iPhone would sport inferior components as compared to Apple’s high-end offering. More than simply replacing the aluminum shell though, as many seem to consider the sole requisite sacrifice, chasing a low price point would also entail filling the device with unremarkable components. As that target price point lowers, so too will the quality of the device’s components, and by extension its performance as well. At the cost of a smaller price tag, Apple will introduce hallmarks of the PC and Android worlds: disparate user experiences, device segmentation, and stymied platform development as app makers cease pushing the platform’s boundaries and begin coding for the least common denominator. And these are only the disadvantages on the technical side: introducing an intentionally inferior device would also damage the company’s reputation as a creator of quality devices, all for the sake of capturing the mid-range market. Apple forgoes this admittedly sizable market in the computing and tablet industries — why enter it in the smartphone space?

At some point in this discussion, after the last vestiges of my previous arguments are torn down and trampled upon, I must bring up one final objection before setting my standard down for the last time. Through the iPhone’s premium price point, Apple has divided the smartphone market and snatched its high end. Herein lies one of the main reasons the community surrounding iOS and Apple in general is so highly regarded within tech circles. With the release of a cheap iPhone, Apple would effectively destroy that barrier. Just as the removal of a dam preludes a deluge down stream, the willful removal of this barrier would lead to an influx of the kind of user whose absence has made the Apple ecosystem the Eden it is today; it would cheapen the user base and severely weaken its credibility, all for the sake of capturing the mid-range. And that’s a sacrifice I don’t think Apple should be willing to make, regardless of the target market’s size.

At some point, though, despite these and other valid arguments against Apple building and releasing a cheap iPhone, one must admit that where there is smoke, there is fire, and that there just might be something to these rumors. Until the day that Tim Cook holds up a plastic iPhone though, I will hold out hope that at least for the foreseeable future, Apple will stick to its guns, continue making the best phones it can possibly manufacture, and stay away from the low-end.