Within the past 12 or so months there have been rumors in regards to a prepaid iPhone, iPhone mini, or cheap (>$350) iPhone. Like most lunatic apple nerds I was listening intently to this last quarters earnings call (LINK) and I paid careful attention to two key points brought up during the call:
“A reduction is expected revenue of 12% in the September quarter because of a future product transition”
Tim Cook responded to a question noting, that Apple was working to “figure out” the prepaid market and that it was not “ceding any market.” Additionally, that Apple would look to “innovate and do clever things” in addressing the market.
While these two points certainly stick out to me as interesting from the call the full weight did not click until I saw this latest rumor posted on 9to5 Mac (LINK). It references code being found in the latest iOS 5 beta that indicates a 3g iPod touch model being created.
This 3g iPod touch would allow a data prepaid plan to be initiated much in the same way an iPad currently allows for 3g service on enabled devices. While the rumor indicates this is a data-only product it would be very simple to include the necessary hardware for voice calls as well. This would create a lower end, more affordable prepaid iPhone. If you use Apple’s own standard pricing you find the entry level iPod touch is $229. If you take a look at the iPads they are currently charging a $129 premium for 3g enabled devices which would put the entry 3g iPod touch right in the magical $350-60 range.
So while I have no inside information as to what will happen I can only take a look historically at Apple and make a educated guess as to what their strategy would be. It is worth nothing that typically Apple does lower its revenue guidance in quarters they launch all new products. At this point I think the odds of a prepaid iPhone / iPod Touch 3g are very high and are a home run for the younger demographic who are buying the iPod touches in droves. Anyone else counting the days to September?
