iPhone Nano Coming?

Today, the web site MacRumors.com has a post reviving the rumors of an upcoming iPhone Nano from Apple. A lot of Apple followers have said that this is a bogus rumor, and that there is no chance of it happening.



I for one have been expecting this, and I hope it does happen. Personally, I appreciate the technical prowess demonstrated in the iPhone. I do not need one, though, and I am certainly not going to pay $200 up front in addition to a $70 or more per month phone plan. While I am sure that if I had an iPhone, I could do a lot with it, I do not need that much capability on my hip at all times. I currently carry a BlackBerry for work, but I do not have my personal e-mail attached to it. I don't need to. And the simple mobile-web browser installed in my BlackBerry or my old RAZR were sufficient for my mobile needs as well. I can check the stock market status, get headlines from CNN, CNNMoney, and ESPN, get local headlines from a nearby TV channel, and get real-time traffic information from Houston Transtar. I don't have to have a special cell phone plan for that, either.



But now imagine if Apple puts the same functionality of a common mobile phone (take a RAZR for example), and includes the media capabilities of an iPod. Suddenly you have a great potential there for sales. I know that I would finally consider switching to iPod from my mp3/WMA devices.



Many are questioning the reason that Apple would want to do this. I think that there is a huge upside in doing this. The retail price for the device could be on par with the current price of an iPod Nano, but the extra cost to manufacture the device would be covered by the carrier subsidies back to Apple. The MacRumor.com article is suggesting a touch-screen interface, which would be perfect since it could display a keypad for phone dialing and a scroll-wheel type of interface for iPod control. The processor in an iPod is probably powerful enough to handle the phone demands, so the only additional internals would be the actual radio chip.



There is also the question of profitability to Apple. However, several websites are suggesting the cost of building the current iPhone 3G is near $150. If Apple can save a little money on the iPhone Nano (smaller screen, less OS memory, slower processor, etc.), they may be able to get the cost down closer to $125. The retail price of the phone could be $150 (the same as a 8GB iPod Nano, but with a phone contract). The subsidy from the carrier could be Apple's profit! (I understand that the cash actually flows a little differently, but the point is the same.)



I have also read comments arguing against the idea of Apple development going backwards technologically. I think the answer here may be more like the case of Tesla Motors. They start with a product development that is high-end and expensive enough to (1) recoup development costs, and (2) limit the product to brand loyalists and early adopters who in reality are more forgiving of bugs and limitations (Tesla Roadster, iPhone). Once the technology is shaken out and the production costs come down due to economies of scale, you produce a more entry level product (future Tesla sedan, iPhone Nano). This dramatically opens the product to new consumers while also making sure that you don't alienate millions of more fickle consumers.



I think that this is a perfect fit for the Apple product line, too. They have the iPod line, culminating in the iPod Touch. They have the Touch equivalent in the iPhone, but nothing to match up with the iPod Nano.



So, will Apple produce the iPhone Nano? I don't know. Would I like it if they did? You bet! I am still not sure that I would get one (I don't need to carry two cell phones), but if I needed a phone, it would definitely be on my short list of options.



Well, only time shall tell!