Nowhere to hide
Forgive us for reporting on the report of a report, but the original source seems quite solid and the ramifications, if true, are profound.
Fortune brings news of a research note written by Deutsche Bank's Chris Whitmore, in which he tells his clients to expect two Apple phone launches this year - generally assumed to be in September.
While tech watchers have been speculating over whether we're going to see an incremental launch - which may be called the iPhone 4S to reflect as much - or a more significant improvement with the iPhone 5 label, Whitmore reckons it will be both. He didn't seem to speculate on specs, but thinks the 4S will be the first iPhone to have a mid-market price.
"With Nokia and RIMM struggling the time is right for Apple to aggressively penetrate the mid range smart-phone market (i.e. $300-500 category) to dramatically expand its [total addressable market] and market share," wrote Whitmore.
This is potentially very scary for the rest of the smartphone business. One of the reasons Android has grown so rapidly is that the iPhone created demand for mobile Internet devices, but is priced at a premium level. The Android ecosystem has been able to exploit mid-market demand by offering their phones for significantly less.
But Apple has shown, with the iPad, that it's prepared to price its products that competitors find hard to beat, and may have decided Android has had it too easy in the mid-market. If it plans to launch an iPhone 5 with the A5 chip, but still has plenty of A4s kicking about, why not use them in a slightly lower-specced phone and charge a couple of hundred dollars less for it?
What remains unproven is how much price has been a factor in limiting Apple's total addressable market with the iPhone. It has certainly sold a lot of them, and the feeling is that anyone who wanted an iPhone has been prepared to pay the premium. Having said that, while $400 or so it hardly impulse-purchase territory, it does allow people to contemplate buying an iPhone without having to sell a kidney, so a whole new market may emerge.
One thing's for sure though, if Apple does decide to launch a mid-market phone there will be a lot of very earnest meetings at the top every other company with an interest in the mobile phone market. They might just have to raise their game yet another level.
In another report, first covered by Apple Insider, Morgan Stanley analyst Katy Huberty wrote that Apple may not be ready to launch its next phone until late September, based on chats she had in Taiwan. She also heard about a cheaper iPhone, and reckons an Apple-branded TV is under development.