Horace Dediu @Asymco is talking about the huge prepay market:
“It may be time for the iPhone to more than just grow. It may be time for it to grow up and take on the whole market. Five billion people are waiting”.
The prepaid market usually means two certain things: cheap phones and low monthly service costs. I do think though the number of users that don’t want their hands tied for 24 months contracts is increasing, but not by that much.
A cheaper iPhone although possible, shouldn’t be a compromise compared to a full fledged one.
Now, let’s make an exercise of imagination; say you’re Apple: what would you get rid of from you iPhone 4 in order to make it cheaper, without compromising the quality or the functionality? Start naming software and / or hardware features.
Is it the camera? Maybe, but it’ll compromise the pictures quality. Is it the display? Maybe, but you’ll have to forget about retina display shout. Is it the RAM? It’d be like downgrading the iPhone 4 to iPhone 3G: forget about it running flawlessly the Infinity Blade… How about putting cheap plastic instead of Gorilla glass? Yeah, right, over Jobs’ dead body maybe.
The only thing a “prepaid iPhone” would have to do is to cope with the apps / iOS; this means: same display resolution, same CPU, same RAM, same connectivity, same interface; maybe not necessarily the same storage (I wonder whether that’d be enough to lower the price with 200$…). Altogether, let’s not forget the iCloud that can possibly act like a remote storage…
I don’t think lowering the specs is a solution; the only one I can imagine now is a dramatic change in iPhone’s architecture, which means a new production line, from scratch. The result could hardly be named “another iPhone”, but “another Apple product”. Wouldn’t that better be some kind of iPod, instead?