Expanding the iPhone and iPad family

Expanding the iPhone and iPad family

Could Apple be planning to expand and round out the iPhone and iPad families by adding higher and/or lower end devices that could appeal to additional segments of the market? While the rumors have been around for as long as the iPhone and iPad themselves, the latest incarnations -- a Retina Display iPad 3 in fall and a cheaper iPhone nano in summer -- make the concept worth looking at again.

iPhone and iPad (and iPod touch) are currently singular offerings. While you can pay extra for more storage, and sometimes last year's model lingers, there's really only one version of each product. Conversely you can get two physical sizes of iMac (though the design is the same), MacBooks, MacBooks Air in 11- and 13-inch, and MacBooks Pro in 13-, 15-, and 17-inch sizes the latter of which has additional ports. On the mobile side, while Apple originally only offered a single iPod they eventually expanded the line, introducing lower price versions like the iPod mini and iPod nano, and an extremely cheap version in the iPod shuffle.

So while Apple never chose to compete with the bargain basement, razor-thin profit margins of low end PCs they did suck all the air out of the MP3 market using massive economies of scale and brilliant supply chain management to keep healthy profits at the same time.

So the question is, will Apple do with the currently singular iPhone and iPad what they did with MacBooks and iPods? Will they offer higher end, pro-style iPads and cheaper nano-style iPhones?

For over 3 years the iPhone was only available on AT&T in the US. Eventually Apple probably figured they'd sold an iPhone to everyone who wanted AT&T or were willing to put up with AT&T just to have an iPhone. They needed a new market. This week they got one with the launch of the Verizon iPhone.

Now while Apple didn't let Verizon put an ugly logo sticker on the iPhone casing, load with bloatware, or lock down its features, they did make a major (for Apple) concession -- they put in a CDMA radio. CDMA is a dying technology. In Canada Bell and Telus have already switched to HSPA+ and in the US Verizon is busy switching to LTE. And if Apple is ruthless about anything it's ruthless about shedding dying technologies (floppy disks, optical disks, Firewire, Flash, etc.) For Apple to invest in designing, engineering, producing, and marketing a CDMA iPhone means they anticipate a huge return on that investment.

But at a certain point everyone who wants an iPhone on Verizon will have one as well. Sure the clichéd RAZR (aka feature phone) users will migrate towards smartphones but not all of them will want the iPhone's singular form factor and not all of them will want the currently still expensive data plans that go with it. Unless Apple addresses their needs, they'll go elsewhere the same way smartphone users who insist on a physical keyboard go elsewhere already.

Apple may not care about them any more than they care about losing bargain PC shoppers to the Acer and ASUS of the world, they may care enough to come up with nano and shuffle-esque solutions, or they may think differently enough to come up with something else entirely.

Likewise Apple may not care about the higher-end tablet market or they may decide they want to do with iPad what they did with MacBook and go pro.

The idea of an iPhone counterpart to the iPod shuffle -- a phone that hooks into iTunes but doesn't require data, just plays music and makes calls and is great to take jogging is interesting and would no doubt capture some of the massive if dwindling feature phone market. But would Apple ever want to field an iPhone that isn't tied into the App Store and the still growing smartphone market? I doubt it.

An iPhone nano -- even if it's just keeping the iPhone 3GS around another year like Georgia suggested on iPhone Live! last night -- is even more interesting. A "free" (subsidized down to $0) iPhone that can use all those App Store apps and has reached such scales that it's incredibly cheap to produce is almost compelling. Whether Apple would want to waste any margin actually making it HP Veer small is debatable but given Jobs' derision of smaller tablet form factors and the user hostility of shrunken UI it doesn't seem likely. Given iPhone 4 went Retina and iPhone 5 will again raise the spec bar, a 3.5-inch 480x320 iPhone could be nano enough.

iPad pro on the other hand is enticing. If Apple can nail the economics of 2x Retina Display on the same 9.7-inch screen it could be downright gorgeous. But what else would differentiate it? Many would love a 7-inch variant but that doesn't say "pro", does it? Others want a version that runs full on Mac OS X but even post-Lion the Mac UI just isn't made for touch. And an iOS that does more Android 3.0 Honeycomb desktop-style computing would have to be universal across all iPads or risk real fragmentation issues. Once an iPad, any iPad, goes Retina, it doesn't seem likely the non-Retina, older generation devices would stick around more than a year or two anyway.

So we're left with there being markets for extended iPhone and iPad families, price points and hardware variations that would appeal to wider user bases, just like the Verizon iPhone is doing right now. Each brings challenges along with it -- some that Apple traditionally wants no part of. But Apple is great at solving challenges in non-traditional ways. Apple will stick to one iPhone and one iPad until they need (not want) to make more. Then they'll expand in a way the rest of the industry doesn't expect -- just like when they brought an iPad to the netbook fight, and an 11-inch MacBook air to the pro portable space.

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Expanding the iPhone and iPad family


Take this with a grain of salt. But, I was in Tokyo last week and a Japanese friend of my friend was adamant that there would be smaller iPad from Apple soon. (Yes, one of those, "My friend is working with Apple and swore to me that..." conversations.)
I said that I didn't believe it. And, I even brought up how Steve Jobs himself said it wasn't a form factor Apple was interested in.
But, after reading this posting and hearing about this "surprise" and knowing that a retina display built to the current iPad size is cost-prohibitive... maybe, just maybe the iPad is going to get a retina display in a smaller form factor.
(Obviously larger than an iPod Touch.)
Which brings up another point. When will they merge the iPod Touch and the iPad into one line of products? I mean, isn't an iPad just a large iPod Touch with the 3G capability? Interesting...

Why Would Apple merge the IPod Touch and IPad into one line of products? Would you bring an IPad to the gym to listen to music while on a treadmill? Cmon guy.

I still cannot understand why everyone wants a 7" iPad. That is a horrible six as it's too large to be all that portable (i.e. You can't fit it in your pocket) but still to small to be a real upgrade to a tablet. I (again, personal preference) like te iPad because it brings touch controls to a large (desktop-esque) screen size. If I am going to use a tablet, it should be large enough that I can easy ready it as I do on a laptop or desktop. Not just a lisghtly enlarged spartphone which is bad enough. Also larger the tablet, larger the battery which is always good. Alright, I'm done.

I wouldnt be surprised if they did come out with a 7inch ipad. The same people who said the galaxy tab was no good because its 7 inches will nod and say this one is magical and revolutionary.

Steve Jobs does that every time there's a competing product. Also, Apple has repeatedly produced a device about one to three years after saying that there is no significant market for one - the iPhone, the iPad, and the updated Apple TV. Jobs said that Apple tested smaller screens for the iPad and that people's fingers are too wide. That kind of statement always clears the way for Apple to later claim that they and they alone have figured out the right way to make such a device.

Like the MacBook and MacBook Pro... why not. Makes real sense to me. The iPad touts business skills but is more leisure and general in appeal. A higher-end range seems to make sense.
I also think they could do well to hit Kindle with an ultra lightweight, tough, low price but better version as an almost pure eBook device. Maybe it could be the 'Lite', or 'Go' version, - long battery life, low weight, extra durability etc.
While I'm all for the Nono approach, I am sure Apple will steer clear of devaluing their brand with budget products in a pure budget sense.

Maybe they will make a duel Mac os: iOS iPad. Now they have app stores in each and lion is becoming mor iOS ish

I am begging Apple to lose the home button on the IPhone 5. Perhaps they can make the home button the same size as the sleep wake button, and locate it on the top just next to the sleep wake button. This would allow enough screen real estate to make it a 4 inch screen, without having to increase the size of the casing. SCORE!

If this is the case, I just sincerely hope that Apple is honest with the consumer. If an Ipad 3, or Ipad Pro, or Ipad HD or whatever is coming out in the Fall, Apple needs to announce it at the same time they announce the Ipad 2. I can deal with one-year product cycles, but to release a new device six months after the Ipad 2 really would risk alienating a lot of people.

I think both an iPad Pro and an iPhone Nano can work in principle. But on the software side a seriously downgraded iPhone Nano could be really problematic because it would lower the lowest common denominator for iOS software. I think an iPhone "nano" can only work if each year Apple reengineers (not just reuse) last year's iPhone model with cheaper and/or more integrated components, reduced to the basic specs and features and with a different design. Sort of what they do with the iPod touch (lower quality screen but same basic size, resolution; lower quality cameras etc.). But more aggressively and on a bigger scale. In fact the iPhone nano would share lots of components with each year's iPod touch (economies of scale at work). And at the same time they must upgrade the iPhone with extra (but non-essential) features and extra quality that's really enticing but doesn't break software compatibility on a basic level (e.g. add NFC, 3D, haptic touchscreen feedback, 4G etc.), like they did with the retina screen.
To summarize: For the iPhone nano reuse the basic(!) specs (not necessarily components) of last year's model and share components with the iPod touch. And for the iPad Pro just go up the ladder in terms of features, quality and specs. To reduce the number of SKUs maybe offer the iPad just with WiFi and two (smaller) storage options like 16GB/32GB (beginning in spring 2012) and the iPad Pro in the fall with 3G/4G only and higher storage capacities (32GB/64GB/128GB).

These cheaper iPhone rumors are ones that I find the most out of left field. I've never seen Apple themselves play the race to the bottom game and don't see them starting any time soon.

Wanted to add; If Apple keeps raking in the dough like they are and the App Stores stays full of developers then there is no reason to sell subpar models just for the sake of doing it. Android is going to become the Windows of smart phones. It's going to be on very good hardware and very bad hardware, Apple can't stop that. They should stay the course.

That's all well and good for them. But really major software upgrades is a must. I'm no software genius but nothing is really integrated. Everything that happens is on top of each other except for the multitasking bar at the bottom. It really takes away from the iPhone and I've been on them since the very beginning. I'm not saying do it like any of the other OS but something.

I really enjoyed reading this. I got all excited thinking about the possibilities that can come from the iPhone - iPad - iPodT line. The direction I see the iPad going would definitely include a Pro and non Pro versions, one with a OS X variant and one with iOS respectively. The reason why I see the iPad leaning towards running an OS X operating system is because the next iPad may include a memory card slot. The day the iPad came out i knew it would eventually evolve into a full fledged or even close to being a computer. A 7 inch version would definitely catch my eye more than the current model. Again, I really enjoyed reading this.