Are the rumors of a less-expensive, no-contract “iPhone Nano” true?
Considering that, as the LA Times pointed out, the many rumors swirling are often conflicting, they can’t all be true. By definition, at least a few of the details must be wrong.
Bloomberg was the first to report of a lighter, cheaper iPhone expected to hit the market in the summer of 2011. The prototype, per Bloomberg, is one-third smaller than today’s iPhones, and it could cost a flat $200—with no two-year provider contract required.
TechCrunch followed by reporting similar rumors that had come to its attention. It also bestowed the prototype—or rather, the rumor of a prototype—with the name (or rather, nickname) “iPhone Nano.” Then, the WSJ added details that the new phone—code name N97 according to an unnamed source—was even smaller than earlier rumors stated:
The new device would be about half the size of the iPhone 4, which is the current model.
Apple is not confirming or denying any of the rumors, of course.
While no one’s sure about the exact size, weight, and many other specifics, all the rumors indicate that the phone would be sold without a mandatory two-year contract. And this detail is the most important development—far more important to consumers than the phone being a little lighter, or the screen being a bit smaller, or the initial price paid at the store.
The big development here is that the long-term cost of owning and using an iPhone could decrease substantially.
… the truth is that the carriers still have way too much power in the U.S., where customers are slaves to the subsidies. And in some ways, Apple is too. Most of their money comes from what AT&T (and now Verizon) pay them upfront for each device.
If Apple began selling the new iPhone directly to customers without requiring a contract, it would be entirely up to the consumer to pick a wireless service and contract that best suits his or her needs. A cheap new, no-contract iPhone would surely attract a HUGE number of customers—ones who’ve been waiting for just this moment, after the early adopters have paid a premium and the item’s price finally comes down to a level that the vast majority of consumers can afford. As Bloomberg report:
“Instead of targeting 25 percent of the global mobile-phone market, Apple would be going after 100 percent,” said Charlie Wolf, an analyst at Needham & Co. in New York.
Now, back to the customer who theoretically has an iPhone and no contract: You’d think that there very well might be plenty of intense competition among wireless providers to sign up these many, many new iPhone owners with service. More competition is good for consumers, who have had to deal with providers holding a monopoly (and now, a duopoly) on the iPhone.
So the new iPhone—and specifically, the absence of a mandatory two-year contract—could be monumental. I write “could be” because the neither the contract clause, nor even the existence if anything like an “iPhone Nano” have been confirmed by Apple. Even if the phone comes to fruition and no contract is required, consumers would still have to wait for wireless providers to engage in a service price war, which is not guaranteed to happen.
And I’ll just float this: Verizon and AT&T have to hate the prospect of losing their strangleholds on the iPhone market. Could Apple be letting the no-contract iPhone rumors swirl just because the idea of a vibrantly competitive marketplace, in which a consumer actually could choose from among several options and provider contracts, would allow Apple to negotiate sweeter deals with Verizon, AT&T, or other providers?