Apple Requiring an 'Innovative, Category-Killer Experience' for Potential Low-End iPhone

black iphone 4 china1Barron's reports on a brief note from RBC Capital Markets analyst Mike Abramsky, who shares some of his "takeaways" from a meeting with Apple Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer.

According to the note, Cook and Oppenheimer continue to believe in a "massive opportunity" for Apple in China, seeing the potential for significant growth there with the company's recent explosion to $9 billion in annual revenue for the market being only the beginning.

Many have viewed the introduction of a low-cost iPhone for the prepaid market to be key for Apple's future success in China and many other countries, and the Apple executives reportedly noted that any such device would have to be "an innovative, category-killer experience". Cook and Oppenheimer obviously did not specifically confirm plans to launch a low-cost iPhone, but it is clear that Apple is working hard on finding a way to break into and succeed in that market.

They include the fact that Apple has a “massive opportunity” in China, with the market there “significantly untapped” despite Apple revenue of $9 billion in the country. Despite an “explosion” of devices based on Google’s (GOOG) “Android” operating system, Apple can maintain a competitive advantage through its integration of hardware and software, and its “curation” of the “application ecosystem.”

Regarding a low-cost iPhone, Abramsky writes that “Apple’s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience.”

Other topics of the discussion included word that Apple's gross margins for the quarter may be better than expected due to it currently being a "buyer's market" for components, and the company's efforts to settle with Android handset manufacturers in the numerous ongoing patent disputes.

Related Forum: iPhone

Popular Stories

iOS 26 Feature

iOS 26.1 to iOS 26.4 Will Add These New Features to Your iPhone

Saturday October 18, 2025 11:00 am PDT by
iOS 26 was released last month, but the software train never stops, and iOS 26.1 beta testing is already underway. So far, iOS 26.1 makes both Apple Intelligence and Live Translation on compatible AirPods available in additional languages, and it includes some other minor changes across the Apple Music, Calendar, Photos, Clock, and Safari apps. More features and changes will follow in future ...
ios 26 1 liquid glass opaque

iOS 26.1 Beta 4 Lets Users Control Liquid Glass Transparency with New Toggle

Monday October 20, 2025 10:57 am PDT by
With the fourth betas of iOS 26.1, iPadOS 26.1, and macOS 26.1, Apple has introduced a new setting that's designed to allow users to customize the look of Liquid Glass. The toggle lets users select from a clear look for Liquid Glass, or a tinted look. Clear is the current Liquid Glass design, which is more transparent and shows the background underneath buttons, bars, and menus, while tinted ...
iPhone Siri Glow

Some Apple Employees Have 'Concerns' About iOS 26.4's Revamped Siri

Sunday October 19, 2025 7:39 am PDT by
iOS 26.4 is expected to introduce a revamped version of Siri powered by Apple Intelligence, but not everyone is satisfied with how well it works. In his Power On newsletter today, Bloomberg's Mark Gurman said some of Apple's software engineers have "concerns" about the overhauled Siri's performance. However, he did not provide any specific details about the shortcomings. iOS 26.4 will...
iOS 26

iOS 26.0.2 Update for iPhones Coming Soon

Friday October 17, 2025 7:35 am PDT by
Apple's software engineers continue to internally test iOS 26.0.2, according to MacRumors logs, which have been a reliable indicator of upcoming iOS versions. iOS 26.0.2 will be a minor update that addresses bugs and/or security vulnerabilities, but we do not know any specific details yet. The update will likely be released by the end of next week. Last month, Apple released iOS 26.0.1,...
Apple iPad Pro hero M5

New iPad Pro Has Six Key Upgrades Beyond M5 Chip

Saturday October 18, 2025 10:57 am PDT by
While the new iPad Pro's headline feature is the M5 chip, the device has some other changes, including N1 and C1X chips, faster storage speeds, and more. With the M5 chip, the new iPad Pro has up to a 20% faster CPU and up to a 40% faster GPU compared to the previous model with the M4 chip, according to Geekbench 6 results. Keep in mind that 256GB and 512GB configurations have a 9-core CPU,...
maxresdefault

Here's How the iOS 26.1 Transparency Toggle Changes Liquid Glass

Monday October 20, 2025 1:55 pm PDT by
With the fourth beta of iOS 26.1, Apple added a toggle that makes Liquid Glass more opaque and reduces transparency. We tested the beta to see where the toggle works and what it looks like. Subscribe to the MacRumors YouTube channel for more videos. If you have the latest iOS 26.1 beta, you can go to Settings > Display and Brightness to get to the new option. Tap on Liquid Glass, then...
HomePod mini and Apple TV

Apple's Next Rumored Products: New HomePod Mini, Apple TV, and More

Thursday October 16, 2025 9:13 am PDT by
Apple on Wednesday updated the 14-inch MacBook Pro, iPad Pro, and Vision Pro with its next-generation M5 chip, but previous rumors have indicated that the company still plans to announce at least a few additional products before the end of the year. The following Apple products have at one point been rumored to be updated in 2025, although it is unclear if the timeframe for any of them has...
iOS 26

What's New in iOS 26.1 Beta 4

Monday October 20, 2025 1:02 pm PDT by
Even though we're at the fourth beta of iOS 26.1, Apple is continuing to add new features. In fact, the fourth beta has some of the biggest changes that we'll get when iOS 26.1 releases to the public later this month. We've rounded up what's new below. Liquid Glass Transparency Toggle Apple added a toggle for customizing the look of Liquid Glass. In Settings > Display and Brightness,...
kohler toilet sensor

Kohler Launches $600 iPhone-Connected Toilet Camera That Monitors Your Health Through Waste Analysis

Monday October 20, 2025 1:42 pm PDT by
Kohler is expanding its line of bathroom products with Dekoda, an iPhone-connected device that's designed to be attached to a toilet rim (via The Verge). The device's included "sensors" point into the toilet bowl, allowing it to analyze what goes on in the bathroom. According to Kohler, Dekoda is a health tracker that can monitor gut health and hydration, as well as detect the presence of...

Top Rated Comments

Andronicus Avatar
186 months ago
Does anyone here know of any harmless weed I can smoke till September ("Fall") ? This wait is killing me.

Normal weed.
Score: 15 Votes (Like | Disagree)
AppleScruff1 Avatar
186 months ago
Will the carriers come out with better data plans to go along with the cheaper iPhone, or will they stay the same? The data plan is what really makes any smartphone expensive to own.
Score: 7 Votes (Like | Disagree)
Shanpdx Avatar
186 months ago
Apple will never do a cheap iphone, it cheapens the brand.

when $299 or $249 is cheap?

So they do not sell iPod touch?

they even sell appletv for $99 with some $20 to $30 margin ...
Score: 4 Votes (Like | Disagree)
theOtherGeoff Avatar
186 months ago
first off, most foreign markets are prepaids plans (you buy your service month to month, no lockin). Mostly because the culture there is to 'buy minutes' (and I assume then GB of 3G as well) I also know part of that is turning on/off services such as data, and the other is floating between a myriad of wireless companies.

So, To get into that market, you need a less expensive phone because no subsidy (and the 2 year lockin to pay off the subsidy) exists, or is tolerated by the market.

2nd, Apple stated up front that they will be aggressive with pricing and models to keep from being undersold. They learned from the Mac Experience, that you must be ready to aggressively protect the brand. The iPod Shuffle is just that device... it's the gateway to the nano, to the touch, to the phone (why... iTunes... no loss of time investment in media management). The term they used early was 'price umbrella' They want that umbrella as low to the floor as possible, to keep other brands from engaging in customer brand loyalty lockin.

Android is to some extent under the umbrella now, however, their capabilities and 'emotional investment' at that level is so low, that it's just a 'cheap phone.' If Apple closes that gap, the brand value ("I can get an iPhone for _almost_ the same price"), That drives for the long term 'halo' (app store, music store, upgrades, iCloud, iPads), which when you have a 'family' of products, is bound to happen.

I know I'd buy my 20 yo daughter a iPhone 4'lite' if it was under $200 and not locked into ATT/Verizon. In a Minute. She has a MacBook, She has a iPod nano. She's graduating from college (poor ATT coverage there, no VZN), and is about to move. a 2 year contract is silly. She has WiFi everywhere. I don't think she needs an iPad (she's a writer... needs a good keyboard). But when she gets a job (hope hope), then she can go get an iPad and not lose her 'investment'

So... a $<300 prepaid solves a lot of problems.
1) it can be the 'free' or $9.99 iPhone for ATT, Sprint, VZN, TMoble in the US
2) it becomes the 'iphone shuffle' (phone, web, 4GB of mem for apps/songs/media,a nice display, and a
3) it lowers that umbrella (you can own an iPhone... or one of those no name android phones that has no experience, and limited support)

Apple's cash allows them to make almost nothing on the shuffle... but it drives the long term (2 years, they'll buy an iPhone) plan. Thats the real beauty of Apple's cash account. They can invest in the future, and make decisions that are focused only on this quarter.
Score: 4 Votes (Like | Disagree)
cvaldes Avatar
186 months ago
Category-Killer ?

What the hell does that mean?
Something that clobbers the competition.

Think iPod touch: annihilated Microsoft's Zune product line. Right now, the iPod touch has no credible competitors.
Score: 4 Votes (Like | Disagree)
Lone Deranger Avatar
186 months ago
Looks like Apple's just getting started. A low cost prepaid iPhone is gonna sweep the legs out from under the competition.
Score: 4 Votes (Like | Disagree)