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."