Tag: iphone 3gs

And just like that, Aircel in India offers iPhone 3GS for $236

A couple of days ago I put down my thoughts as to why the 3GS might remain on Apple’s line up and it primarily hinges on the fact that Apple cannot offer the iPhone 4 for less than $350 let alone $300. As it turns out, Aircel in India has begun to offer the 3GS unlocked for $236 including a $55 one year post paid voice, text, and data package. The catch is that the data package is 2G only, but that’s beside the point. You can take the iPhone out of India and it will work with any SIM card anywhere, for far less than $300, the price point I put forward in that earlier blog post.

This could be Aircel trying to clear inventory, but knowing some details as to how Apple deals with carriers, this promo would not have gone ahead without Apple’s authorization unless Aircel is willing to face severe penalties.

You see, Apple sets the price that iPhones are sold around the world. Any marketing material, any promo, billboard placements, advertisements, and the like must all receive a green light from Apple, otherwise the carrier partner will be penalized. It happened before with Telkomsel in Indonesia when it launched an ad campaign ahead of the iPhone 4 launch at the end of 2010.

Apparently the telco had gone with the campaign before Apple approved the material and as a result, its head of marketing for iPhone was recalled back to parent company Singtel, and Telkomsel had difficulties acquiring more iPhone 4 from Apple in early 2011 as it faced shortages.

The importance of the 3GS being maintained in price-sensitive markets is that it allows Apple to offer a low cost iPhone to a far greater range of consumers who might otherwise consider the more affordable Android or BlackBerry phones.

Apple faces difficulties in selling iPhones in emerging markets where consumers are used to paying full price for phones instead of agreeing to contracts that subsidizes the up front cost of the phone. Having the 3GS in that lower price range will remove or at least reduce that challenge and puts the iPhone within reach.

The 3GS may be a three year old phone, but it’s still an iPhone and it still runs the latest operating system and will run much of the same apps as the newer models. After all, most of the Android and BlackBerry phones within that price range may be brand new models but they are not exactly state of the art phones either.

Why I think the iPhone 3GS may be retained instead of the iPhone 4

Matthew Panzarino for TheNextWeb

The iPhone ‘next’ would be the flagship, the iPhone 4S would offer Siri and take the place of the 4 in the pricing lineup, and the 3GS would remain ‘free’ on contract. But, if the prices were right, Apple could expand the 3GS from a contract device to an off-contract pre-paid model that might finally give the company a horse in the developing nations race.

The iPhone business is still an evolving one for Apple. It may be their largest money maker already right now but they can still tweak this into something bigger as the prepaid and emerging markets are still a little bit beyond the iPhone.

Apple used to sell one model iPhone, now they sell three, two of which are identical. When Apple introduces the next iPhone, it could drop the 3GS off for being too old or it could decide that having two identical phones is confusing and kill off iPhone 4.

Having the 3GS and 4S alongside the upcoming model makes sense to me because the three models are different enough to be aimed at different market segments, similar to how the iPod line up has different models for different markets and purposes.

The 3GS could be the low cost iPhone primarily aimed at prepaid or emerging markets in which consumers buy phones outright with no carrier subsidies. The phone currently costs around $400-450 outright. If Apple can drop that even further, it would be a boon in emerging markets as well as among the lower income bracket.

The 3GS has allowed Apple to enter the lower price range without having to create another phone specifically for that purpose. Thanks to the decision to include the 3GS in iOS 6 deployment, the phone will remain current at least until 2013. Buyers of the 3GS won’t feel too left out as it will still carry many of the features available to the newer iPhones.

The 3GS may be free with a two year contract in the US, but in markets with no carrier contracts, it’s far from free. If Apple can offer it for $300 or less, it would sway a lot of buyers who may otherwise go for Android, Windows Phone, or even BlackBerry.

The 3GS would still be competitive against the midrange Samsung and HTC phones and the lure of iMessage, Line, and WhatsApp would go some way to keep BlackBerry at bay.

The iPhone 4S essentially is an upgrade to the iPhone 4 so I’d rather see the iPhone 4 killed off than the 3GS. The 4S can be the mid-range phone that offers most of the features in iOS 6, limited in hardware features due to the technical inferiority compared to the upcoming iPhone.

The iPhone 4 of course offers more than the 3GS but why go with 4 when the 4S offers much of the same but better? The 3GS would cost less to manufacture too which means it would be more affordable to consumers. Both 3GS and 4 also do not have Siri. Rather than have a phone that looks similar but has fewer features, might as well go with the one that actually looks different.

These technical barriers are why it makes sense to have the iPhone 4 killed off instead of the 3GS. The 3GS is distinct enough to be a different iPhone yet still offer many of the features in iOS 6. The average consumer would immediately know the difference and understand why certain hardware oriented features like video calling, 3D mapping, built-in turn by turn navigation, and Siri aren’t available on their iPhone.

The 3GS is also less likely to break or shatter when dropped from a height of three feet or so. For a low cost phone, that resilience is more important compared to the more expensive phones since people are more likely to buy cases for those.

On top of that, it’s unlikely for Apple to offer the iPhone 4 outright for $350 or less. And this is probably the biggest reason for Apple to stick with iPhone 3GS instead of iPhone 4.

[Update] Alternatively, what John Gruber said. 3GS goes cheap for markets outside of the USA and iPhone 4 takes 3GS’s place as the “free” phone on US carriers. This might complicate matters a little bit in International markets though.

I don’t know why people are making such a big fuss on whether Apple will release a brand new redesigned iPhone. The current models are fine as they are. If they’re gonna release a new phone, the design doesn’t have to be changed.

Apple didn’t change the iMac’s design for years at a time. The MacBook went through several revisions over two years without a new design. Same with the transition from PowerBook to MacBook Pro. Oh, and don’t get me started on the Power Mac G5 to Mac Pro.

The design of the iPhone 3G was maintained over two versions, so why not maintain the current form for the next release? iPhone 4 is still the top selling phone in the US, followed by the 3GS despite being more than 15 months old and in the case of 3GS, more than 24 months old. That tells you that the designs work pretty well. It’s never form over function.