Article: The $99 iPhone

It seems the Apple Web was full of rumors of a $99 4GB version of the iPhone to be sold at Walmart, but everyone’s opinions seemed mixed. That price is with a two-year service agreement, saving you $100 from its double-capacity sibling. What are the issues with this?

Many argue that this pricing will cheapen the iPhone. I don’t see what the problem with that is. I think if Apple tried to make an “iPhone nano”, it would fail miserably. The current iPhone/iPod touch form factor is about as small as you can get and still keeping the device usable. Therefore, the only way to make a “lite” model is to cut some of the costs. Sure, random people on the street won’t be able to tell the difference between a 4GB, 8GB, or 16GB iPhone at first glance, but the point is that there’s one platform. I often get confused for having an iPhone when I pull out my iPod touch. I use it because it works well, not because I’m trying to be cool or some iPhone poseur.

4GB is going to be plenty for a few songs or videos, a bunch of apps, and some photos. Certainly more than your average $99 phone (memory cards excluded). However, this will put the iPhone platform in the hands of more and more people, increasing market share. This is a good thing because it will force Blackberry, Microsoft, and anyone else to innovate and make better competitors.

A $99 iPhone is nice, but what is going to hurt it is the $30 mandatory data plan. I live in a place where I have access to good WiFi for free, so I don’t need a data plan on my phone. Saving that money is what kept me away from AT&T’s redundant EDGE data service and an iPhone (vs. the iPod touch). You can get a Blackberry or Windows Mobile device without a data plan, so why not the iPhone? Sure, it’s not as good in some regards, but that’s the one thing that I’d love to do—carry one device instead of two.

Some say that it will make the iPhone as widespread as the RAZR. So what? The RAZR is actually a pretty good phone (I used to use the candybar-equivalent SLVR), but Motorola stopped being innovative. I doubt that would happen with Apple, so once the iPhone gets in the hands of the masses, we’ll see the next thing in line. It happened with the iPods.