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Rumors of more than one iPhone being unveiled later this year continue to circulate, and a new story about’s Apple’s negotiations with China Telecon might just be pointing (again) in that direction.
The news comes via Sohu.com, through Ticonderoga Securities analyst Brian White, who wrote that China Telecom and Apple have reached a “preliminary agreement” which will enable China’s third largest carrier to begin selling the iPhone before the end of October. The most significant part of that news, however, is that China Telecom will sell not just the next-generation iPhone, but also a “simplified” version of the iPhone 4.
[Note: a late October release for China Telecom doesn’t necessarily mean a late October release for the U.S.; in fact, it means it would be earlier than that, but it does mean, if true, that it will probably be a late October release for China Unicom, as well.]
White wrote, “According to Sohu.com, China Telecom will offer two types of iPhone that include the iPhone 5 and a ‘simplified iPhone 4.’ Essentially, this potential ‘simplified iPhone 4’ would be a more economical version of iPhone to target a broader customer base in developing countries such as China, allowing for an expanded market opportunity.”
This simplified phone has been rumored before. While some have said the next-generation iPhone would be minimally changed and called an iPhone 4S, there have also been rumors that the iPhone 4S, while it will exist, would be a version of the iPhone designed for the large number of countries that prefer no-contract, pre-paid plans.
Of China Telecom’s 108.4 million wireless subscribers, only about 13 to 15 million use high-end devices, meaning an iPhone 5 would represent a possible revenue opportunity between $8 – 9 billion, White said. If, however, Apple adds in the “simplified iPhone 4,” that revenue opportunity could rise to $30 billion (assuming all of China Telecom’s subscribers could then afford one or the other device), he estimated.
The thing is, if Apple were to release two different phones for the Chinese market, why wouldn’t they do so globally. In fact, they would.
White estimated that if Apple only extended the dual-iPhone strategy to the entire Chinese market (much less the entire world), it would increase the potential market opportunity from about $70 billion to $200 billion.
Imagine the addressable market that Apple would have if it had a dual-iPhone strategy (and we don’t mean, as it currently does, with a year-old iPhone with reduced storage).