Apple Requiring an 'Innovative, Category-Killer Experience' for Potential Low-End iPhone

black iphone 4 china1Barron's reports on a brief note from RBC Capital Markets analyst Mike Abramsky, who shares some of his "takeaways" from a meeting with Apple Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer.

According to the note, Cook and Oppenheimer continue to believe in a "massive opportunity" for Apple in China, seeing the potential for significant growth there with the company's recent explosion to $9 billion in annual revenue for the market being only the beginning.

Many have viewed the introduction of a low-cost iPhone for the prepaid market to be key for Apple's future success in China and many other countries, and the Apple executives reportedly noted that any such device would have to be "an innovative, category-killer experience". Cook and Oppenheimer obviously did not specifically confirm plans to launch a low-cost iPhone, but it is clear that Apple is working hard on finding a way to break into and succeed in that market.

They include the fact that Apple has a “massive opportunity” in China, with the market there “significantly untapped” despite Apple revenue of $9 billion in the country. Despite an “explosion” of devices based on Google’s (GOOG) “Android” operating system, Apple can maintain a competitive advantage through its integration of hardware and software, and its “curation” of the “application ecosystem.”

Regarding a low-cost iPhone, Abramsky writes that “Apple’s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience.”

Other topics of the discussion included word that Apple's gross margins for the quarter may be better than expected due to it currently being a "buyer's market" for components, and the company's efforts to settle with Android handset manufacturers in the numerous ongoing patent disputes.

Related Forum: iPhone

Popular Stories

iOS 26 Battery Glass Feature

iOS 26.1 Beta Liquid Glass Battery Drain Test: Tinted vs Clear Mode

Friday October 24, 2025 2:30 pm PDT by
In the fourth iOS 26.1 beta, Apple added a "Tinted" option that reduces the translucency of Liquid Glass for those who prefer a more opaque look. I saw some comments wondering whether the setting might preserve battery life, so I thought I'd do some testing. Test Settings I did four separate tests using the iPhone 17 Pro Max, and I kept the parameters as similar as possible. Here are the...
iOS 26

iOS 26.1 Coming Soon With These 8 New Features for Your iPhone

Wednesday October 22, 2025 6:15 am PDT by
The upcoming iOS 26.1 update includes a handful of new features and changes for iPhones, including a toggle for changing the appearance of the Liquid Glass design, "slide to stop" for alarms in the Clock app, and more. iOS 26.1 is currently in beta testing. The update will likely be released in the first half of November, and it is compatible with the iPhone 11 series and newer, but some...
iOS 26 Maps Glass

Apple Reportedly Moving Ahead With Ads in Maps App

Sunday October 26, 2025 6:22 am PDT by
Apple Maps could feature integrated ads as soon as next year, Bloomberg's Mark Gurman reports. In his latest "Power On" newsletter, Gurman said that Apple's plan to bring more ads to iOS is moving "gaining traction," with the Maps app being next in line. The project will apparently give restaurants and other businesses the option to pay to have their details featured more prominently in...
Emergency SOS via Satellite iPhone YT

iPhone 18 Pro Rumored to Support Full 5G Satellite Internet

Friday October 24, 2025 7:18 am PDT by
At least some new iPhone models launching next year may support full 5G satellite internet, according to a report this week from The Information. "Apple plans to add support in upcoming iPhones as early as next year for 5G networks that aren't tethered to Earth's surface, which includes satellites," the report said. "That would give the iPhone full internet access over satellite," it added. ...
trump white house ballroom

Apple Donating to Trump's $350M White House Ballroom Project

Thursday October 23, 2025 3:55 pm PDT by
Apple is one of several tech companies that will contribute to the construction of U.S. President Donald Trump's 90,000-square-foot ballroom, reports CNN. Construction began on the ballroom this week, and the White House's east wing was torn down. Trump claims that the ballroom will cost $350 million, and that it will be privately funded through donations. The cost has already increased $150 ...
iPhone 17 Colors

iPhone 18 Rumored to Feature 50% More RAM

Saturday October 25, 2025 2:57 am PDT by
Apple's upcoming iPhone 18 could feature 50% more memory than its predecessor, according to Korea's The Bell. With its latest iPhone lineup, the iPhone Air, iPhone 17 Pro, and iPhone 17 Pro Max feature 12GB of memory. This is a significant increase of 4GB more their predecessors, largely driven by the demands of on-device artificial intelligence processing. The iPhone 17 is the only new...
All Screen iPhone 2027 Feature 1

Report: Apple to Skip 'iPhone 19' Name for 'iPhone 20'

Thursday October 23, 2025 4:28 am PDT by
Apple's new iPhone lineup launched in the fall of 2027 will be called the "iPhone 20" models, rather than the "iPhone 19," according to research firm Omdia. Speaking at a conference in Seoul (via ETNews), Omdia Chief Researcher Heo Moo-yeol corroborated rumors that Apple plans to move the launch of its standard iPhone to the first half of the year and provided some additional clarity about...
iOS 26 Feature

iOS 26 Leaker Being Sued by Apple is Actually a 'Lifelong Apple Fanboy'

Friday October 24, 2025 9:20 am PDT by
In July, Apple sued well-known YouTuber Jon Prosser and his acquaintance Michael Ramacciotti over alleged theft of the company's trade secrets, after Prosser leaked some iOS 26 details in videos uploaded to his YouTube channel Front Page Tech. If you are not caught up on the lawsuit, read our initial coverage to learn more. Earlier this week, Prosser told The Verge he has "been in active...
maxresdefault

The MacRumors Show: iPhone Air Is in Trouble

Friday October 24, 2025 8:32 am PDT by
On this week's episode of The MacRumors Show, we discuss the latest rumors about the iPhone Air not selling as well as Apple hoped. Subscribe to The MacRumors Show YouTube channel for more videos There have been many recent reports suggesting the iPhone Air has failed to catch on with consumers, with Apple moving to cut production due to lower-than-expected sales. The first warning sign was...

Top Rated Comments

Andronicus Avatar
186 months ago
Does anyone here know of any harmless weed I can smoke till September ("Fall") ? This wait is killing me.

Normal weed.
Score: 15 Votes (Like | Disagree)
AppleScruff1 Avatar
186 months ago
Will the carriers come out with better data plans to go along with the cheaper iPhone, or will they stay the same? The data plan is what really makes any smartphone expensive to own.
Score: 7 Votes (Like | Disagree)
Shanpdx Avatar
186 months ago
Apple will never do a cheap iphone, it cheapens the brand.

when $299 or $249 is cheap?

So they do not sell iPod touch?

they even sell appletv for $99 with some $20 to $30 margin ...
Score: 4 Votes (Like | Disagree)
theOtherGeoff Avatar
186 months ago
first off, most foreign markets are prepaids plans (you buy your service month to month, no lockin). Mostly because the culture there is to 'buy minutes' (and I assume then GB of 3G as well) I also know part of that is turning on/off services such as data, and the other is floating between a myriad of wireless companies.

So, To get into that market, you need a less expensive phone because no subsidy (and the 2 year lockin to pay off the subsidy) exists, or is tolerated by the market.

2nd, Apple stated up front that they will be aggressive with pricing and models to keep from being undersold. They learned from the Mac Experience, that you must be ready to aggressively protect the brand. The iPod Shuffle is just that device... it's the gateway to the nano, to the touch, to the phone (why... iTunes... no loss of time investment in media management). The term they used early was 'price umbrella' They want that umbrella as low to the floor as possible, to keep other brands from engaging in customer brand loyalty lockin.

Android is to some extent under the umbrella now, however, their capabilities and 'emotional investment' at that level is so low, that it's just a 'cheap phone.' If Apple closes that gap, the brand value ("I can get an iPhone for _almost_ the same price"), That drives for the long term 'halo' (app store, music store, upgrades, iCloud, iPads), which when you have a 'family' of products, is bound to happen.

I know I'd buy my 20 yo daughter a iPhone 4'lite' if it was under $200 and not locked into ATT/Verizon. In a Minute. She has a MacBook, She has a iPod nano. She's graduating from college (poor ATT coverage there, no VZN), and is about to move. a 2 year contract is silly. She has WiFi everywhere. I don't think she needs an iPad (she's a writer... needs a good keyboard). But when she gets a job (hope hope), then she can go get an iPad and not lose her 'investment'

So... a $<300 prepaid solves a lot of problems.
1) it can be the 'free' or $9.99 iPhone for ATT, Sprint, VZN, TMoble in the US
2) it becomes the 'iphone shuffle' (phone, web, 4GB of mem for apps/songs/media,a nice display, and a
3) it lowers that umbrella (you can own an iPhone... or one of those no name android phones that has no experience, and limited support)

Apple's cash allows them to make almost nothing on the shuffle... but it drives the long term (2 years, they'll buy an iPhone) plan. Thats the real beauty of Apple's cash account. They can invest in the future, and make decisions that are focused only on this quarter.
Score: 4 Votes (Like | Disagree)
cvaldes Avatar
186 months ago
Category-Killer ?

What the hell does that mean?
Something that clobbers the competition.

Think iPod touch: annihilated Microsoft's Zune product line. Right now, the iPod touch has no credible competitors.
Score: 4 Votes (Like | Disagree)
Lone Deranger Avatar
186 months ago
Looks like Apple's just getting started. A low cost prepaid iPhone is gonna sweep the legs out from under the competition.
Score: 4 Votes (Like | Disagree)