Ever since the iPhone 4, it seems there have been rumors of Apple releasing two iPhones with one being a cheaper model for emerging markets, and lower income households. Currently, Apple positions the iPhone 4S for $99 and iPhone 4 for free with a two year contract as their cheaper models, but without carrier subsidiaries those devices are still $550 and $450, respectively. Rumors this year have intensified about a cheaper iPhone with perhaps a plastic shell, and other concessions.
Apple has never been about making a cheaper product just for the sake of being cheaper. Apple said they couldn’t make a $500 Mac that lives up to their standards, and instead came out with a completely different product in the iPad. They also didn’t make a cheaper iPad just to be cheaper, but rather a completely different form factor and purpose with the iPad mini. A cheaper iPhone that looks like the iPhone 5, but with cheaper parts just isn’t the way Apple is going to do things, and a cheaper iPhone may never come.
On the other hand, Apple could once again make a cheaper product by introducing a whole new product segment. There has been a lot of talk about the iWatch, and most of it has centered around it being an iOS accessory because so many are caught up with existing products rather than thinking about the future. The iWatch could be a cheaper iPhone in a whole new way with all of the functionality of an iPhone, but in a size that could fit on your wrist. The iWatch could be a stand-alone product with the ability to make calls, connect with Siri, have its own SDK, and a few unique features including NFC payments, activity and sleep tracking, nano projector, and of course convenient size.
The iWatch could always be an accessory to the full sized iPhone or iPad, but it could also be a cheaper entry point to the iOS ecosystem. Some may have a problem of speaking into their watch for calls, but there are always headphones or Bluetooth accessories. Apple could up end the entire market with a brand new product that could be a sole phone for one person, and a valuable accessory for another.
The iWatch has the potential to be Apple’s next game changing product, and it all comes down to what their goals are for such a device.