Will the Plastic iPhone knock the iPhone 4S out of this year’s free iPhone pattern?

Credit: Ferry Passchier

We’ve seen a pretty consistent pattern when a new iPhone is released: the previous model gets significantly cheaper, and the model before that tends to be widely available on free-with-contract deals. We’ve already seen the process beginning in anticipation of the 5S, with AT&T cutting the on-contract price of the iPhone 5 to $99 and 4S to $49, with Walmart going a little further with a $39 deal for the 4S.

But with the prospect of the long-awaited low-cost (or lower-cost!) iPhone being released at the same time as the 5S, might we expect to see the plastic iPhone being offered as the freebie in the iPhone 4S’s place … ? 

Tumbler blogger Sammy the Walrus thinks so:

We don’t yet know what the plastic iPhone will cost, but we’ve seen numbers ranging from an exceedingly unlikely $99 to a high-end estimate of $349-99 range. Even if it’s at the top end of that range, it’s going to be on par with the 4S. Any carrier subsidy that allows them to offer a free 4S would allow them to offer a free plastic iPhone instead.

Die 30-pin, die
From both Apple and the carrier perspectives, selling phones with the same Lightning connector makes it easier to phase out docks and accessories with the old 30-pin connectors, simplifying inventory and cutting costs significantly. If you sell a 4S as a current model, you can’t very well decide not to sell any accessories for it, but if it’s been demoted to an officially old phone, you no longer have to support it in the same way. I’m sure that Apple in particular would like to free up some of that very expensive shelf-space. The iPad 2 would be the only remaining 30-pin device (unless you count relics like the iPod classsic) and the low end iPad could easily see a Lightning update as well this year.

The danger for Apple, however, is the risk of cannibalising 5S sales. It would be betting that its core market – those willing to shell out the big bucks for an iPhone – will want the real-deal metal version enough to pay the premium, or will be sufficiently snobbish that they wouldn’t want to be seen with the ‘cheap’ iPhone. If it’s right, there would be limited impact on 5S sales, while it brings on board a demographic which has so far been unable to afford an iPhone.

But it would be a gamble. If enough existing iPhone customers decide they really like the funky colours of the plastic phone, and don’t care about the ‘snob appeal’ of owning the pricier version, the hit to Apple’s bottom-line could be substantial.

Which is why there’s also a possibility Apple could take a more cautious approach: offer the plastic phone only in developing markets like China and India. That’s the market Apple is really after with the plastic phone – the growth markets where iPhones are currently beyond the reach of the average consumer. If it offers the handset only in these markets, then the pattern in the US and Europe remains unchanged, and the 4S gets to enjoy a little more life.