Apple COO Tim Cook talks cheaper iPhones, huge tablet market growth

During a meeting with Bernstein analyst Toni Sacconaghi, Apple COO Tim Cook referred to the iPhone as "the mother of all halos" because of its ability to expand sales of other core products like the iPad and the Mac. Cook went on to strongly suggest that Apple would be releasing a cheaper iPhone in the not-so-distant future:

The analyst says Cook “appeared to reaffirm the notion that Apple is likely to develop lower priced offerings” to expand the market for the iPhone. Cook said the company is planning “clever things” to address the prepaid market, and that Apple did not want its products to be “just for the rich,” and that the company is “not ceding any market.”

Could Cook be referring to the rumored release of a cheaper, smaller iPhone Nano? Maybe, maybe not. Last time Cook said Apple had ideas about netbooks we got iPad and the 11-inch MacBook Air.

In addition, Apple CFO Peter Oppenheimer suggested that rumors of a soft-SIM or "Universal SIM" iPhone may be in the works to help Apple prevent carriers from dictating terms, which would ultimately be beneficial for the consumer.

One last significant tidbit was that Tim Cook indicated the tablet market will eventually out-grow the entire consumer PC market, with all major PC manufactures jumping into the game. However Apple believes that, despite growing competition, they will remain a leader in the space because of their innovations and year-long head start.

So with Apple possibly expanding their iOS product line, what do you think a "cheaper iPhone" might actually be like? Let us know in the comments!


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Andrew Wray

Andrew Wray is a Salt Lake City, Utah based writer who focuses on news, how-tos, and jailbreak. Andrew also enjoys running, spending time with his daughter, and jamming out on his guitar. He works in a management position for Unisys Technical Services, a subsidiary of Unisys Corporation.

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Reader comments

Apple COO Tim Cook talks cheaper iPhones, huge tablet market growth


OMG, its a couple of months without Steve Jobs and Apple is starting to sound like 1986 all over again. Next thing will be licensing iOS...

I don't understand something, please explain: what does it mean to make another cheaper iPhone?
I mean, Apple already offers a cheaper iPhone, it's called "last year's model". I believe it is about half the cost (with contract) than the current model (with contract), but is it full size and is mostly full-featured.
And there is another iPhone that is cheaper yet, at $50 (with contract). It's design is two years old, but hey, it works, has a warrantee, and runs apps. And can it get any cheaper than $50?
Why does Apple need to devote resources to design another product for a market they already reach?
Besides, an iPhone with a smaller screen wouldn't run existing apps, so what's the point? It wouldn't be an iPhone.
Ah, I see where this is going: it would be a screen-less phone. It wouldn't run apps at all, it would just make phone calls. It would be the size of a dialpad, and no bigger. Mic built-in, Bluetooth to an earpiece.

Because the Iphone 3GS at $50 on a 2yr contract IS NOT ALL THAT CHEAP ..
As the article suggests, A cheaper Iphone really means A PREPAID IPHONE ... When A phone is free on contract and requires you to have an expensive AT&T or Verizon data plan .. then IT"S NOT ALL THAT CHEAP.
I don't know what an Iphone 3GS is without contract.. but I'm sure it's at least $500 .. That, my friend, would not qualify as cheap.
The LG Optimus V on Virgin Mobile is $200 with no contract... it's a very capable Android phone. It can do most of what the high end Android phone can.. without the big screen real estate and the high resolution screen. I"m sure Tim is trying to target THAT market.

Jerry, are you serious? Comparing a LG to an iPhone LOL! Apples and oranges buddy...apples and oranges.

Apple will make a cheaper iPhone that has fewer features but ties to the Apple ecosystem. Not sure whether they'll keep the same form factor, but a Nano wouldn't really be cheaper if they packed the ability to run iOS4 on it. I'm thinking similar size, cheaper display, processor and memory. At the volumes they run, this ought to get the price down significantly. Cut multitasking, HD anything and they probably meet the need of the texting masses without dumbing down the brand.
Problem is, Apple likes to be innovative with everything, so I don't know how they do this at a low price.

Just think of Apple TV 2G, 99$ no string attached, 1 million sold in no time.
Did it prevent Apple from selling tablets and phones ? No, so a cheap no contract Iphone nano will be similar : a blessing for many, and those who want the high end stay on a contract. All this is a no-brainer, Apple is just waiting for technology to become cheap enough to release it.

What Apple should do is offer a iPhone without 3G data. It could be like a iPod Touch and operate all the apps on WiFi but the phone part is just a cell phone. Then people could have a iPhone but still have a standard cell phone bill.
Or work out some type of pay as you go service for data plans so you don't have to buy a data plan if all you want from Verizon or AT&T is the phone service.
T-Moblie has a prepaid phone plan where you can get data service by the day, I think it is $1.50 per day for unlimited data. If you can have a phone plan and just sign up for data on those days you need it, that would be more affordable for average folks.

Another possibility might be to have 3G data service available for the iPod Touch with data plans like those available for the iPad. You could then use the iPod as a phone with VoIP services with just a data plan and not have to have a cell phone plan at all.
If Apple wanted to they could make Facetime work with out the face part. Just voice on a facetime call, by passing the cell phone and just operating on a data plan.

Gary, that is an absolutely brilliant suggestion. Disable the data, retain wifi, have the phone work (and retain text messaging capability). That would be an almost perfect way to do an iPhone on the cheap. And, of course, Apple has a model for how to do something like that -- the iPad. They offer it with wifi only or wifi + data on AT&T (or on Verizon right now, wifi + a mifi card).

I think Apple will remain ahead but at the same time not really. Yeah their products will be really innovative at the time they come out, but the competition will catch up and then surpass them. The MacBook Pros are an example of that as there are older Windows laptops that still surpass the new ones in specs. I think that Apple may not be a leader in the market but they'll be the lead innovator that'll change how we use computers. I'm waiting for the day there's an affordable tablet PC that's got a full desktop OS that can take the place of a gaming PC.

I think you folks are forgetting. You already can have any iPhone without a data plan. H2O wireless offer it in several variations. You can also just a a 3G only plan by registering and iPad imei and fitting it to any model iPhone. Both options I mention are no contract any require no hacks.