Apple may be targeting the lower end of the cell phone market, reports Bloomberg, citing unidentified “people who have been briefed on the plans.”
Apple is apparently working on a smaller version of the iPhone that uses older components and has no “Home” button. It’s roughly two-thirds the size of a regular iPhone and would supposedly cost $200 out the door with no two-year cell phone service plan required.
Before you get too excited, these same people have indicated that although “Apple has aimed to unveil the device near mid-year, the introduction may be delayed or scrapped,” according to Bloomberg.
If released here in the U.S., such a device would need to be compatible with the various network technologies used by the major service providers. It’d be interesting to see if Apple would cram multiple compatible chipsets into a single handset or offer separate handsets compatible with each network.
One iPhone to rule them all?
It may have some sort of plan in the works already, according to a second rumor from the same Bloomberg article. Apple has apparently been working on a universal SIM card that would allow an iPhone to hop from network to network via a simple software setting. It’s unknown whether the mythical $200 iPhone would be the actual phone used with this universal SIM card or not.
On a GSM network such as the ones used by AT&T and T-Mobile here in the U.S. and most European carriers, a phone is identified as belonging to a particular network by a small, interchangeable SIM (subscriber identity module) card. Though the cards themselves are the same, physically, across networks, the information contained on the cards is specific to each carrier.
This supposed universal SIM card that Apple’s apparently working on would be built directly into the phone itself and could have its network compatibility information altered via software. The idea would be that you could just walk into an Apple store, buy an iPhone, and then set it up yourself with whichever carrier you feel like using. Don’t like that carrier? Switch to another one.
In Europe, where most of the carriers use GSM technology, someone with this type of iPhone could theoretically hop from network to network with ease. The rumor also indicates that this same universal SIM iPhone may contain a CDMA chipset as well—CDMA being the other major cell technology used by carriers such as Verizon and Sprint here in the U.S. and others abroad.
Carrier settings and billing?
The challenge of such a universally compatible phone is that it would rely on the user changing the phone’s settings to connect to different carriers and paying different bills to different providers based on usage.
However, Apple apparently has a patent in the works that would handle all this heavy lifting automatically and route payments through iTunes.
It’d effectively turn Apple into a mobile virtual network operator (MVNO) similar to companies like TracFone here in the U.S.—the company re-sells no-contract airtime that it leases from AT&T, T-Mobile and Verizon. In this case, Apple would handle your phone number and billing information.
“Traditional MVNOs purchase wireless minutes in bulk from existing carriers and resell them to customers. Apple’s system could set off a bidding war between providers, potentially driving prices down…
…Using Apple’s proposed system, a user could specify carrier preferences for different rates, locations and times that would then be dynamically selected by the iPhone.
An additional step that would likely enrage carriers would be for Apple to handle the accounting for the MVNO service and bill iPhone users through their iTunes account. Much like the controversial in-app subscriptions on the iPad, such a system would leave valuable user information in the hands of Apple, rather than the wireless carriers.”
That last section of the quote represents the biggest challenge that Apple would be up against—getting the carriers on board with such a system. It could potentially work abroad where there are a lot of service providers across multiple countries competing to sell airtime to users.
It’d likely be a harder sell in the U.S. to get all four major carriers on board—there’s just not enough competition here. It’d be too consumer-friendly and not carrier-friendly enough, in other words. I know, right?
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