[trotsky]

Yet reports seem to indicate Apple is planning on rolling out a "budget" price point phone [1], so they probably are worried about market share after all.

Apple is on a long term digital media dominance play. They want to be the one stop locked in shop for many people's music, software, video and books. Sure they'll continue to be interested in making good money on their hardware but their evolving iOS platform strategies clearly point to what they're looking forward to. And in that version of the world where content sales is king, market share means a whole lot.

http://techcrunch.com/2011/02/10/iphone-nano/

[AllenKids]

These kinda rumors are literally a dim a dozen. I'll believe it when I see it.

Of course it is a perfectly valid strategy and Apple successfully implemented just that with its iPod line. Still the timing and implementation are everything. Handset market is clearly more competitive and turbulent, Apple is treading extremely cautiously.

[epistasis]

A "budget" price point phone would be better understood in terms of market segmentation rather than market share; i.e. getting money from people who have a lower maximum price, now that they've gotten money from those who are willing to pay more.

If they wanted market share, they would have just led with the "budget" phone.

[r00fus]

> If they wanted market share, they would have just led with the "budget" phone.

But Apple has a luxury brand, and a "budget" device would detract from that (even the lowly iPod shuffle fills a niche for well-off folks: it's small and sleek).

Budget in this context means pre-paid (as per the last earnings ). And I bet that iPhone will not be compatible with a post-paid plan (or vice-versa)... it will be interesting to see how Apple navigates this as they've been very deft at positioning new products in terms of their existing product lines.

[gonzo]

Tim Cook has made several pointed references lately to the pre-paid market.