When Deutsche Bank’s Chris Whitmore claimed Apple would release a second iPhone model, we considered it just another random claim. After all, people have been saying for years that Apple would release an iPhone variant model, be it smaller than the original, or otherwise watered down. John Gruber weighed in on the claim and considers it a matter of fact; to Gruber, a second iPhone is just a matter of time.
Examine the history of the iPod to see how this will play out. They’ll press technologically at the high end, and they’ll expand into the mid-range market with lower priced models. Why not now?
The difference with the iPod is that all the iPod models did the same thing: they played mp3s. Some had larger storage options than others (just as the iPhone already does), but functionally they were all equal. The biggest difference between them, and still today, is storage, which comes down to a matter of form factor choice, not features. The only reason the iPod Shuffle lacks features (a visual screen) is because the form factor takes precedence. Just look at the iPod lineup today. The choice boils down to how much music you want at your fingertips, and how small you need your music player to be. The only exception here is the iPod Touch, which is the exception because it’s a phone-less iPhone; if storage costs weren’t an issue, then the Touch would replace the iPod Classic without consideration.
Taking the iPhone along a road similar to the iPod is problematic because the success of the iPhone isn’t in the core phone software. That is to say, the iPhone, unlike the iPod, is not a one-trick pony. It does a lot of things well, whereas the iPod did one primary thing well: play mp3s. This means the iPhone experience can’t be replicated by watering the device down and selling it for cheap, because customers will still want the iPhone experience, which means downloading, and using, all the same apps that other iPhone users have. That means the hardware needs to stay pretty much the same in every iPhone sold, which means the form factor can’t be tweaked too much.
Cellular telephone carriers have had success in selling older iPhone models for cheaper prices, this much is true. That’s because the features these devices offered weren’t too far different from the features available in the latest iPhone. So long as Apple rolls out the next iOS version and doesn’t abandon last year’s iPhones, everyone gets to play with the latest apps, even if there’s slight degradation in performance.1 So Apple could just keep up production of last year’s iPhone when a new version comes out, and use that as a lower-cost alternative. But beyond that, there’s not much Apple can do to offer a next-gen, low-cost iPhone without cutting too many experiential features. Nixing things like the camera, gyroscope, or GPS would detract from the iPhone experience, and Apple wants to maintain consistency of user experience as much as possible across their lineup, which is why the only alternative versions of the iPhone we’ve seen to date have been storage or carrier based.
Moving to a smaller form factor doesn’t make much of a difference either; Apple would still need to cram all the latest technology into a smaller package, with maybe the only fair trade-off being storage. But that likely wouldn’t make up for the cut in price, and graphically, the device would have to fit at least the original iPhone’s resolution into a smaller screen. Not to mention, who’s complaining that the iPhone is too big? It made sense for Apple to offer smaller (and lighter) iPods for those wanting to take their tunes into the gym or on the trail, but the iPhone is a different beast.2
Maybe Apple will brand a totally different phone as an iPhone lite, but why would it sacrifice the very things that make the iPhone awesome just to sell a phone that’s cheaper? If carriers can sell the iPhone 3GS for $50 with a two-year contract, then Apple can figure out a way to keep up production of older iPhones models for another year or two just to make sales to those who still can’t afford a new iPhone. But for the time being, don’t expect “lite”, “mini”, or “nano”-like branding for a future iPhone variant.