The rumors around the upcoming iPhone 5, expected to be announced this month, are swirling like Quidditch players around a Quaffle. The iPhone 5 will have a bigger screen, smaller bezel, lozenge shaped home button and be thinner than the current iPhone. Or maybe Apple will revamp the iPhone 4 into an iPhone 4S, like it did with the 3G/3GS. Or perhaps it is making an all-new cheap pre-pay iPhone as well as an iPhone 5. It's all so very confusing.
What if these rumors are mixing up not a new iPhone 5 and a new, low-cost pay-as-you-go iPhone 4S? What if they are instead mixing up an iPhone 4S (faster A5 chip, better camera) and a replacement for the iPad Touch – an iPad Nano, if you will?
Think about it. The iPod Touch is fantastic, but it lacks the always-on connectivity that make the iPhone such a great pocket computer. But iPod Touch buyers don't want a cellphone contract. If they did, they'd buy an iPhone.
What if Apple uses the iPad carrier model for the Touch, shipping two versions: Wi-Fi and Wi-Fi+3G? The Wi-Fi model would be just what we have now, only with a four-inch screen and lozenge-shaped home button, and the Wi-Fi+3G would come with a 3G chipset and GPS. Buyers could opt in and out of monthly data plans just like they do with the iPad Wi-Fi+3G.
What about phone calls? It won't make them, but I'd expect most customers for the iPad Nano (or iPod Touch 3G, or whatever it's called) will either already have crappy pre-paid cellphones or be tied into a work-contract phone and not want another monthly bill. Or they just don't care about phones anymore.
But – crucially – it will have both FaceTime and iMessage. These are data-only replacements for voice calls, video calls, and SMS. Right now FaceTime doesn't work over 3G, but there are reports that this will change in iOS 5.
Kids already opt for BlackBerry's to use BBM (BlackBerry Messenger) to send free messages. Imagine how willing parents would be to buy their kids a device with a fixed (and low) monthly bill that would cover all calls and communication. I'd say they'd be very willing.
Apple CEO Tim Cook already mentioned pre-pay iPhones, saying that Apple "understood price is big factor in the prepaid market." It would be a typical Apple move to sidestep the question of pre-pay phones altogether by simply eliminating the need for a phone as we know it.
Even the carriers win. Take me as an example: I pay around €35 ($48) per month for a 2GB data plan for my iPad, but pay around €10 every two months, on average, to "recharge" the credit on my phone. With a 3G iPod, I'd happily sign up for a cheap, low-bandwidth monthly plan. Sure, the carrier won't get anything near what it might from a two-year contract, but it is a lot more than it's getting from me now.
High-volume users of voice will either have to opt for a more expensive monthly plan or switch to a regular phone contract. Like I said – everyone wins.
This post is pure speculation, of course. I have seen the same tea-leaves as anyone else, although my job means I look a little closer than most. But is seems to make some sense of the hash of rumors and – more importantly – it fits in very well to Apple's simple, clearly defined product categories.
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