Why Apple Shouldn't Release a Budget iPhone 'Mini'

Taking a break from Apple TV for a moment, the most recent Apple rumor is the iPhone Mini, a supposedly budget phone being

iPhone 4 (Photo credit: marc.flores)

suggested by places like the Wall Street Journal. It’s a tempting proposition, but it would be a terrible idea.

The reasons for an iPhone Mini appear to make sense. Samsung is gaining massive ground in the markets all over the world by offering a range of products tailored to all sorts of budgets, whereas Apple continues to sit at the very top of the price range. The spread of Android products is a threat to iOS mindshare and app advantage, and Apple may soon need to be working to get the iPhone into more people’s hands to avoid allowing Android to overshadow it completely.

Given that scenario, Apple could release an iPhone Mini in order to keep iOS prominent and to make sure people continue to equate “iPhone” with “smartphone.” As the iPhone saturates potential customers at the top of the price range, Apple continues to grow by snatching up new demographics.

The big problem? Apple already sells a cheaper iPhone — the iPhone 4s. In America, I can pick one up for $99, below the cheapest estimates cited for the fabled “iPhone Mini.” Likewise, I can grab the iPhone 4 for free, with contract. When the iPhone 6 rolls around, the cheap phone will become the iPhone 5. A similar thing happens with iPads, where the iPad 2 is only marginally more expensive than the iPad Mini.

So Apple building a new $100-$150 iPhone wouldn’t be Apple building a “cheaper” iPhone so much as Apple building a “worse” iPhone. For Apple, high profit-margins and invincible loyalty are the most valuable resources in the world. Diluting the iPhone brand would be too high a price for a product with such questionable benefits. I have no doubt that Apple is experimenting with how to build iPhones more cheaply, but I don’t think that those experiments will result in some sort of new budget iPhone.

Luckily, consumers are still looking good here. If you want an iPhone but don’t want to shell out for an iPhone 5, you don’t have to wait for a theoretical iPhone mini. Just pick up the 4S.