Wednesday, June 29, 2011

The iPhone 5 News Blog News Feed

The iPhone 5 News Blog News Feed

Analyst Claims iPhone 3Gs To Stay Around After iPhone 5 Release, Offered For Free

Posted: 29 Jun 2011 07:40 AM PDT


In recent days, new analyses from a wide range of techno-financial analysts have posited the theory that Apple will release a new, contract-free iPhone 4s along with the iPhone 5 in a bid to make the iPhone more affordable and available to developing countries. Combined with the notion that the iPhone 4 would continue to be offered, that makes three iPhone models on the market at the same time.

Today, Mike Abramsky, an analyst at RBC Capital Markets, added a fourth iPhone to that list — the iPhone 3Gs — and suggested that Apple will make the iPhone 3Gs available for FREE to users looking to upgrade their contracts, or for prospective iPhone users who are unwilling to plunk down any money to sample the whole “iPhone experience.” Abramsky explains:

“This approach is intended to target mid-market smartphone buyers and counter Android's mid-market expansion. We expect iPhone 5 to launch at $199/$299 ($599/$699 unsubsidized), and Apple to drop iPhone 4 pricing to $99 ($499 unsubsidized)."

You can read our full coverage of the IBT article that reported this story on the iPhone 5 News Ticker.

Abramsky’s model conveniently leaves out mentioning the iPhone 4s, sensing that the idea of four iPhone models available at once seems implausible at best. That being said, the sum total of these recent analyses combine to suggest that Apple will flood the iPhone market with 2+ years of iPhone iterations in an effort to pave the streets with iPhones.

There’s also a business logic error with Abramsky’s theory, which fails to take into consideration that the iPhone 3Gs is only available in the U.S. on AT&T, which means that Apple would be favoring AT&T over Verizon by incentivizing a FREE iPhone 3Gs. Think about it: Apple would be sending AT&T tons of potential sales direct from its website and stores, not to mention AT&T’s own promotional initiatives to sell the iPhone 3Gs for free with a contract extension. Now that Apple maintains partnerships with AT&T and Verizon, it seems like an improbability that Apple would risk damaging their partnership with Verizon over the iPhone 3Gs.

iPhone 5 Analysts — Clueless

There’s a reason why tech analysts like Mike Abramsky don’t work for Mr. Jobs — rarely do their ideas make any sense. While it is true that iOS 5 currently supporting the iPhone 3Gs lends some creedence to the idea that Apple is not yet ready to put the 3Gs into mothballs, the prospect of the 3Gs remaining in the mix of iPhones — and being offered for FREE on AT&T’s network — suggests to me that Mr. Abramsky might be hallucinating.

Moreover, when you step back and look at the dearth of incoherent, uninformed opinions levied by these so-called “analysts” — none of which ever seem to come true — what it suggests to me is that top investment companies simply affix the “analyst” title to someone who isn’t responsible enough to broker multi-million-dollar deals and instead let them do ad hoc interviews with IBT, Forbes, CNET, and other top media outlets as a way of promoting the company they work for and stoking the rumor mill. The rumor mill, after all, can move the stock market — remember the recent bogus form factor rumor, or the postulating of Steve Jobs’ health?

The fact is, your perspective on the iPhone and Apple’s next move often makes a great deal more sense than what these analysts claim. After all, you’re not suggesting in your blog comments that, come September, Apple will be selling an iPhone 5, iPhone 4s, iPhone 4, and FREE iPHone 3Gs . . .

. . . are you?