iPhone Nano in 2011

by Bill French on 14/02/11 at 5:00 am

Bill French is an information architect specializing in Internet applications. He is also the co-founder of MyST Technology Partners and Senior Editor for iPhoneCTO.

As reported by me last year (iPhone Nano and Mega Models Likley in 2011) and now more precisely confirmed by Bloomberg (Apple Is Said to Work on Cheaper, Smaller IPhones) recently with real (though unidentified) sources, iPhone Nano is likely in 2011. As I said in 2010,

“It’s my further speculation that these phones are designed to meet high and low-end consumer and business requirements. Imagine an iPhone the size of a candy bar…”

It’s really no surprise; Apple needs to keep its competitors, specifically the flood of Android devices, at bay to maintain some degree of iOS market share. One way to do this is to create a device that expands the iOS customer base with little friction. Speculation in 2010 by Kaufman Brothers analyst Shaw Wu was spot on.

Kaufman Brothers analyst Shaw Wu has stated as reported by the Wall Street Journal that Apple is indeed experimenting with different iPhone form factors and that they may be launched as early as 2011. Woo speculates that these two phones could launch as early as next year in the US and on carriers other than AT&T.

Today, according to Bloombergs report …

One version would be cheaper and smaller than the most recent iPhone, said a person who has seen a prototype and asked not to be identified because the plans haven’t been made public. Apple also is developing technology that makes it easier to use the iPhone on multiple wireless networks, two people said.

Apple currently offers two low-end iPhone models, the 8GB 3Gs at $99 and the iPhone 4 16GB for $199. It wouldn’t be difficult to imagine an 8GB iPhone 4 Nano without a data plan. An inexpensive ($99) nano version of the popular iPhone 4 product with limited screen real estate probably wouldn’t cannibalize sales of the 3GS or the current 16GB iPhone 4 and it would open up whole new market opportunity for the younger generation who can afford an iPhone but can’t bear the burden of a data plan. More important – a phone of this stature could be offered for free with provider subsidies. And this form factor likely wouldn’t benefit a data plan because it wouldn’t be ideal for consuming Internet content. Optionally, a data plan could be made available and my hunch is it would be small bytes with fixed pricing much like the iPad 3G data plan.

Down-market strategies are rare for Apple but not out of the question. We’ve seen them do this with iPod Nano and iPod Mini. However, carriers add a little twist to the multi-dimensional revenue aspects of smart phones. iPhone Nano would be a relatively smart(er) phone than most of the Android-based subsidized devices out there. This could play a key role in Apple’s ability to sustain market share in the face of the Android tsunami.

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