Smaller, Less expensive iPhone is Planned - Sources Say
Apple plans to launch a cheaper version of the iPhone in the fourth quarter that could be based on the ultra-slim iPod Nano music player, according to a JP Morgan report.
Kevin Chang, a JP Morgan analyst based in Taiwan, cited people in the supply channel that he did not name and an application with the U.S. Patent and Trademark office for his report.
Apple filed a patent application document that refers to a multifunctional handheld device with a circular touch pad control, similar to the Nanos scroll wheel.
Apple did not respond to requests for comment.
Long lines of people turned out on June 29 when U.S. sales began for the iPhone, a mobile phone with a music player and Web browser. Analysts have estimated that sales in the first weekend were as high as 700,000 units.
Chang said a way to follow up the iPhone with a cheaper version would be to convert the Nano into a phone and price it at $300 or lower. The iPhone sells for $500 and $600, depending on storage space.
We believe that iPod Nano will be converted into a phone because its probably the only way for Apple to launch a lower end phone without severely cannibalizing iPod Nano, he said noting that the new phone could have rather limited functionality.
Because of the anticipated lower price, 2008 sales of 30 million to 40 million units is achievable, Chang said.
This would be a much larger volume than is expected of the first iPhone, Apple has targeted sales of 10 million units in 2008, which would give it a 1 percent share of the global market.