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Apple Denies iPhone Nano Reports

Lower-Priced iPhone May Be in the Works

By Mark Huffman
ConsumerAffairs.com

July 11, 2007

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Not everyone is willing to fork over $500 for an iPhone, so Apple may be planning to introduce a cheaper version.

At least that’s the opinion of an industry analyst, who says a new model, based on Apple’s iPod Nano, might sell for less than $300.

Kevin Chang, an analyst for JPMorgan Chase, based in Taipei, says Apple has recently filed a patent for such a device. He also says unnamed parts manufacturers have confirmed his hunch.

Apple has declined comment.

The patent Chang refers to describes a multifunctional handheld device with a circular touch control wheel. In a note, he said he expects to see the device on the market soon.

However, other analysts who cover Apple are not so sure consumers will see a low-cost alternative to the iPhone anytime soon.

Chang’s New York colleague, JPMorgan Chase’s Bill Shope, says the patent more likely reflects Apple’s plan to eventually add communications capabilities to its next generation iPods. He says that for Apple to move so quickly to bring a new product online defies its historical business patterns.

The Apple iPhone went on sale June 29, commanding prices of $499 and $599, depending on memory size. Sales estimates for the two days range from 250,000 units to 525,000.

There were early complaints over “activation issues,” as many consumers who stood in line to buy one of Apple’s new iPhones had difficulty in getting it to work.

“Your activation requires additional time to complete,” many consumers reported being told.

Normally, a mobile phone is activated by personnel in the retail store where it is purchased. But with the anticipated sales volume for the new device, Apple and AT&T devised a plan whereby consumers would activate the phones themselves, connecting the phone to their computers and using Apple’s iTunes to complete the process.

AT&T said the system worked as planned for the vast majority of consumers but conceded some customers experienced “activation issues.”

Postings on Apple message boards complained of the difficulty of transferring service from an existing AT&T account to a new iPhone. An AT&T spokesman said those attempting to transfer a corporate account to their new iPhone might have encountered extra difficulties.

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