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Analyst: Next iPhone could lack data plans

updated 03:55 pm EST, Wed February 4, 2009

Next iPhone to lack data?

Bernstein Research's Toni Sacconaghi has made several bold predictions, suggesting that an iPhone nano could arrive without the ability to run apps and browse the Internet. He expects that the standalone music player market will continue to shrink, driving customers to trade iPods for cell phones that can also play music. A significant majority of those customers would find the iPhone too expensive, primarily because of the data service plans that average over $70 a month.

Sacconaghi considers the expensive contracts as "the biggest gating factor to mass market adoption." While smartphones establish 17 percent of the total handset market, the other 83 percent of mobile handsets provide limited functionality.

The analyst observes an opportunity for Apple to migrate a large number of its 100 million iPod users to the iPhone. "We note that these users would likely be very partial to migrating to an Apple offering, given their familiarity with iTunes and purchases of DRM encoded content," Sacconaghi said.

Two handsets were considered in the research; an iPhone nano with music and video capabilities but without browser or app capabilities, or an iPhone touch with a cellular modem but lacking 3G or GPS functionality. Sacconaghi expects that either of the devices would grab three percent of the non-smartphone market, while gaining significant revenues and gross profits for each device.

The particular prediction that a future iPhone would lack data connectivity goes against many rumors and suggestions that point to a smaller device that still offers data access and app support. A case leak shows a handset that is slightly shorter and thicker than the current 3G model.

Tim Cook addressed the issue recently, also dismissing the notion. "You know us, we're not gonna play in the low-end voice-phone business, that's not who we are, that's not why we're here," he said. "We'll let somebody else do that. Our objective is not to be the unit-share leader in the cell phone industry, it's to build the world's best phone."



By Electronista Staff
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  1. chotty

    Fresh-Faced Recruit

    Joined: Jan 2003

    -1

    Umm,

    If it won't help leverage the App store & iTunes store, Apple won't release it...

  1. ff11

    Fresh-Faced Recruit

    Joined: Apr 2004

    0

    iPhone touch

    If it is the iPhone touch, it would leverage the App store.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +2

    Re: Ummm

    I don't think so. They're currently selling iPod nanos, Shuffles, and Classics, none of which don't leverage the app store, not to mention Macs themselves.

    Of course since we know Apple doesn't like to make too many products (thus the reasoning behind no mini-tower, right all, it just adds to inventory issues), why not just allow people to buy an iPhone and not be burdened with a freakin' data plan?

    Solves all the troubles without having to build/design/release a whole new product.

    I know, too damned easy.

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    +1

    Toni...

    Needs to find a new job. This analysis borders on the retarded.

  1. bluejammm

    Fresh-Faced Recruit

    Joined: Jul 2006

    0

    I agree

    I agree with Testudo...again.

    But let's see a unit with 64GB!

  1. ff11

    Fresh-Faced Recruit

    Joined: Apr 2004

    0

    re: Ummm

    The only problem with shipping an iPod without the data plan is that right now, AT&T pays a good chunk of the cost, expecting to make it up on the data plan. They probably wouldn't pay Apple as much for the data-plan-less iPhone, which would make an iPhone without a data plan much more expensive (initially) than one with the data plan. That might be a tough sell.

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