Apple planning iPhone Nano

A report from financial services firm JPMorgan has suggested that Apple is planning to launch a cheaper, smaller version of its iPhone smartphone.

Expected in the fourth quarter of this year, the entry-level phone could be based on the ultra-slim iPod Nano music player.

Kevin Chang, a JP Morgan analyst based in Taiwan, cited people in the supply channel he did not name and an application with the US Patent and Trademark office for his report.

However, as with the original iPhone, any such device would have to go through rigorous testing and be subject to public certification filing in both the US with the FCC and the UK with Ofcom, neither of which have been started at the time of writing, suggesting that if any such phone is in the offing, it is at least six months away. The original iPhone was announced in January, before any such filings were made, with the first phones going on sale six months later.

Apple filed a patent application document dated 5 July that refers to a multifunctional handheld device with a circular touch pad control, similar to the Nano's scroll wheel.

Apple spokeswoman Natalie Kerris declined comment.

Long lines of people turned out on 29 June when US sales began for the iPhone. Analysts have estimated that sales in the first weekend were as high as 700,000 units.

Chang said a way to follow up the iPhone with a cheaper version would be to convert the Nano into a phone and price it at $300 (₤150) or lower. The iPhone sells only on a new airtime contract for $500 (₤250) and $600 (₤300) before US sales tax - the equivalent of VAT - depending on storage space.

"We believe that iPod Nano will be converted into a phone because it's probably the only way for Apple to launch a lower end phone without severely cannibalising iPod Nano," he said noting that the new phone could have "rather limited functionality."

Another analyst Gene Munster of Piper Jaffray said he expects Apple to bring out iPods that resemble iPhone, which features such as a touch-sensitive screen, later this year. Such products would help stop iPhone eating into iPod sales.

"We believe the iPhone reveals much of what the iPod will soon be," Munster said in a note to clients, "iPods with some of the touchscreen features of the iPhone should lessen the impact of cannibalisation."

Kerris also declined comment on Munster's note.

Due to the anticipated lower price for the Nano-based phone, 2008 sales of 30 million to 40 million units "is achievable," according to JP Morgan's Chang.

This would be a much larger volume than is expected of the first iPhone, Apple has targeted sales of 10 million units in 2008, which would give it a 1 percent share of the global market.

Sales of the iPhone are expected to be limited to a small percentage of the market due to its high price tag, particularly in the US where 85 percent of consumers tend to spend $100 (₤50) or less on mobile phones.

But analysts forecast that a cheaper phone from Apple, which leads the digital music player market, could pose a much bigger threat to long-established phone makers such as Nokia, Motorola, Samsung and Sony Ericsson.

(Additional reporting by Sinead Carew and Sheena Lee)

Mobile phone news, reviews, themes and downloads at Know Your Mobile

Email to a friend

Print this page

Social Bookmark this article: What is this?

Digg

Delicious

Reddit

StumbleUpon

Slashdot

Google

Facebook