Only One iPhone This Year

For the last few months, a rumor that Apple would release two devices this year went around, and to be honest, it seemed to make lots of sense. Apple would release a full-featured iPhone, selling it at the normal full price. The company would also release a watered down version of the iPhone 4 aimed at taking a stab at the prepaid market. I thought this to be highly believable. If you’ve ever been to Asia or Africa (I have), you’ll know that the prepaid market there is gigantic. This is an untapped market for Apple.

So the rumor mill went crazy on this rumor, and everyone, at some point or the other, seemed to agree we’d see two iPhones this year. John Paczkowski of AllThingsD now thinks otherwise…
In a post published earlier today, Paczkowski cites Wedge Partners analyst Brian Blair who believes Apple has no plan to introduce a low-cost iPhone this year.

When it comes to Apple rumors or controlled leaks, Paczkowski has an outstanding track record. The guy clearly has his sources at Apple, and when he speaks, you want to listen.

According to Blair, the iPhone 5 will sport an A5 chip, an 8MP camera, and possibly a larger screen. It will also look a lot like the iPhone 4. Nothing we hadn’t heard before.

Paczkowski ends his post by quoting Blair:

We don’t expect a second, dramatically different iPhone to accompany this as we don’t think Apple needs to have 3 models in the market to address the high end, mid-tier and low end since the iPhone 4 (with memory lowered to 8 GB) will drop to $99 and effectively attack those markets.

Why would Apple bump up only the processor specs of the iPhone 4 in addition to a newly designed iPhone 5 if the goal is to sell it into the pre-paid market at a lower cost?

A 4S would simply cost more and a 4S itself wouldn’t create a mid-tier market unless it was priced at $99 and the iPhone 4 went to $49 with the new iPhone at $199. We see this scenario as unlikely.

The final word of the post is “agreed”. Something tells me that once again, Paczkowski has some insider information. I’ll put my money on him.

You?