The iPhone 4 was launched in Canada on July 30th 2010, and I purchased my iPhone 4 from the Apple Store in the Ottawa Rideau Centre within a few days of the launch. When the iPhone 3GS was introduced in 2009, the previous iPhone 3G model was offered at a reduced price. Likewise, when the iPhone 4 was introduced, the iPhone 3GS became the de facto entry-level iPhone.
To ensure the Apple store had enough stock to satisfy everyone lined up, a store employee moved down the line asking each person which model of iPhone 4 they were planning on purchasing, and the employee would confirm availability of the requested model. When the store employee asked the couple ahead of me which iPhone 4 they wanted, the couple replied that they intended to purchase an iPhone 3GS. The store employee was visibly surprised. Yes, this couple had needlessly waited in line to buy the previous generation iPhone 3GS, because of the lower price. After the store employee made certain the couple wanted an iPhone 3GS, they were pulled out of the line and moved directly into the Apple store.
Here we are in July 2011, with rumours of a new iPhone model expected in September. It has been rumoured that Apple might offer an incrementally improved model called the iPhone 4S, or that Apple might release an entirely new iPhone 5. It has also been rumoured, nearly since the introduction of the first iPhone, that Apple will introduce a new entry-level iPhone. And, if that wasn't enough, past rumours of a 3G data-capable iPod touch have been revived.
Regardless of what Apple releases in September, people will continue to buy the entry-level model offered alongside the newly introduced model. The couple ahead of me in the iPhone 4 queue last July, intending to buy an iPhone 3GS, are part of an important group of iPhone buyers. In May, All Things D reported the iPhone 3GS was still selling stronger than some Android phones. In October 2010, Horace Dediu suggested the value of Apple continuing to offer the previous iPhone model was a psychological ploy intended to increase the perceived value of the latest generation iPhone versus both the previous generation model and the competition.
Remember iOS 4 on the iPhone 3G ?
My concerns with the current Apple practice of offering the previous generation iPhone alongside the newest model are primarily about not meeting the expectations of people who bought the previous generation hardware, possibly only weeks or days before their device becomes two generations old, especially when newer versions of iOS are released.
Remember when iOS 4 was released in June 2010?
By the time iOS 4 was publicly released, I had been running it on my iPhone 3GS for weeks without any trouble. However, iOS 4 was a disaster for owners of the previous iPhone 3G model. The performance of iOS 4 on the iPhone 3G was unspeakably bad, making it nearly unusable. I rightly got an earful from my wife who upgraded her iPhone 3G to iOS 4 on my recommendation, and similar grumbles from friends who I encouraged to upgrade.
While I don't expect the upcoming release of iOS 5 to be as problematic for the current entry-level iPhone 3GS, the fundamental problem remains that iOS is evolving quickly, arguably advancing faster than the hardware, and meeting the Apple standard of user-experience on hardware two generations old will continue to be a challenge -- at least until Apple stops the practice of offering previous generation hardware as the entry-level choice.
So, what do I want Apple to introduce in September? I want an all-new entry-level model, and a new flagship model.
I want Apple to move towards releasing a refreshed entry-level model alongside the flagship model with each iPhone product cycle. The entry-level model would share the same CPU and core capabilities as the flagship model, and differentiate on materials used in the device shell, display quality, and some features. In many ways, Apple already does this by releasing a new iPod touch every year, sharing the same CPU and core performance characteristics as the current generation iPhone.
I hope that the ultimate answer to conflicting rumours about whether Apple is releasing an iPhone 4S or an iPhone 5 is essentially, "Yes, both."