Thursday, May 17, 2012

Best Buy offers the iPhone 4 for $49.99 as rumors heat up about this fall's launch of the iPhone 5

I have to admit that I like my new phone plan: each year my wife and I get new iPhones and we then pass down the old iPhones to the kids. Everyone seems happy with the plan, especially AT&T, who keep up locked in. But how does Apple, and the retailers, break through the cost of a new iPhone and encourage new customers to take the plunge?
The answer, of course, is through continuing to sell the older model, but at a discount. That is why the iPhone 4 continues to be available.

Since the launch of the iPhone 4S, carriers and retailers have been selling the iPhone 4 at $99.99 (for the 8 gig model). The discounted iPhone is the only way Apple and their partners can compete against the huge range of free and low priced Android phones being offered.

Now Best Buy has slashed the price even further, now promoting the iPhone 4 at $49.99.

This low priced iPhone isn't targeted to you and me. Techies and those who monitor these things know that a new iPhone will arrive in the fall, as usual. Who wants an iPhone that is two generations behind, and will be three generations behind by the time the 2-year contract expires? Well, lots of people, that who.

It still remains true that lots of consumers are still lugging around dumb phones. And each year kids continue the annoying habit of growing up, and thus becoming consumers (what every American kid dreams of).

The fact that the iPhone has not changed its basic design since its launch in 2007 means that older models don't look like anything other than an iPhone, and are therefore still attractive to buyers (besides, the OS is updated, unlike that Android phone they may be dumping).

This is constant design and the built-in marketing advantage it represents is one argument for dismissing the rumor that Apple will be going to a 4-inch display with the new model. Any larger iPhone, even if the actual size is only slightly increased (or not at all), might mean some consumers will see the older models as truly outdated.

But I'll go out on a limb a little by stating that the 4-inch display rumor is one of the few I tend to believe (a lot more than the 7-inch tab rumor). The reason is simple: the current design of the iPhone allows for a slight lengthening of the display without the phone itself having to grow much in size – though some mock-ups on rumor sites are simply growing the phone itself rather than shrinking the wasted space on the phone.

Usually media professionals who have built mobile and tablet apps don't need to concern themselves with the implications of new hardware – it is the software changes that concern them more. But a basic change in the display of the iPhone may prove to be as disruptive as the higher resolution of the new iPad has been. It is almost enough to keep a developer up at night, and one can expect a flood of app updates if Apple truly does change its iPhone display.