Apple’s Low Cost iPhone – Good or Bad Idea?

Apple LogoBelieve it or not, this isn’t as slam dunk as you might think it is…

Emerging markets are a big deal.

In areas like China, Korea, parts of Africa, etc., where there are untapped consumers just waiting to buy a smartphone, the right device at the right price can sell and sell very well. Low cost, low margin phones are intended to make money in volume sales.

According to an article published on TUAW, former Apple CEO John Sculley agrees that Apple needs to produce the low cost device, which for many in those markets, is the only computing device they will own. While Sculley acknowledges that there’s “nothing wrong” with the current iPhone, he also acknowledged that Samsung is very good at what they do, and implied that Apple needs to figure it out and provide a competing product.

Sculley agreed that Tim Cook is the right person to lead Apple at this time due to his operations experience. Apple’s decision to cut its product update cycles to 6 months instead of 12 will require solid supply chain experience, and that’s right up Cook’s alley.

While its still unknown if a low cost iPhone would make an appearance in either the US or Europe, there seems to be a shift in thought in the smartphone arena. Lower cost, unsubsidized devices seem to be the direction that the world wants the industry to go. That being the case, I suspect that we’re going to see a number of exciting changes over the next year or so.

Whether or not a low cost iPhone is a good or bad idea is going to be validated by Apple’s financial and stock performance. The markets seem very fickle right now, with Apple stock jumping 3-5% over the past couple of days on news of component order cancellations and their 2013 product pipeline, respectively. Until the world decides that Apple knows what it wants to be when it grows up, I’d expect a great deal of fluctuation in their stock price and speculation in the news regarding the company’s viability in a post-Jobs era.

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Kindle Fire Lacks (even BASIC) Purchase Controls

Let’s face it, despite what Amazon has to say, the Kindle Fire really just isn’t kid friendly…

I bought my wife a Kindle Fire for Christmas. After a couple of days hesitation with the device, she really got into it, and now, really likes it. Small, easy to carry and for her AND the kids to use, it’s become a standard in her daily gadget line up. In fact, neither her nor the kids have it far from them during the day. Clearly, a sign of a good purchase and gift decision on my part.

However, the tablet, and subsequently Amazon’s ecosystem, have a major flaw in them; and it’s one that you won’t even bump into unless you either have kids that share your Fire or you lose/misplace the device – it has absolutely NO purchase controls.

If you order the device directly from Amazon, the device comes in a clearly MARKED box and comes preactivated with links directly to your credit card and your account. Anyone smart enough to intercept the shipment will have the ability to purchase away inside of Amazon’s online store, with YOU responsible for all of the purchases.

Strike one – Pre-activation

The device itself doesn’t have any method, or way of either excluding your purchasing credentials/credit card info or even password protecting all purchases with your Amazon.com site password. If you have the device, again, you have direct access to your account, and as long as you have money in your debit account, available credit on your card, etc., anyone possessing the device can make all the purchases they want.

Strike two – Have device, can purchase

When I confronted Amazon with this HUGE security (and frankly, clearly common sense) hole, they let me know that Amazon addressed this by putting a password on Wi-Fi access, so if you wanted to prevent purchases, you could password protect the device’s ability to get online.

This made me to a double take; and really ticked me off.

Strike three – Failure to address the specific issue: Purchase control

I think Amazon wants to differentiate themselves in the tablet market by giving their users the clear ability to purchase anything and everything they would want or need on the Kindle Fire without having to enter a password. Really..?! Am I the only one who sees this huge security hole? I give them points for wanting this to be easy, but talk about your advanced identity theft tools..! Apparently, all I need to steal someone’s credit is not their credit card number, their social security number or any of their personal, private information. All I really need is their Kindle Fire.

Nice.

Let’s forget the real world scenario that I bumped into with my 4 year old ordering an entire season’s worth of Olivia, and that I just want to gate purchases on the device with the linked account’s Amazon password (which you see on every Apple iDevice in town, including the iPad). According to Amazon, this is unreasonable. It’s also something they are NOT going to address.

They’ve given users the ability to limit the use of Wi-Fi instead. You need Wi-Fi to make purchases. With Wi-Fi password protected, you can’t purchase new content. That’s true; but it also fails to address the problem. The Kindle Fire is a content streaming device.

Amazon Prime’s streaming service requires an internet connection. The Fire is a Wi-Fi only device, and in order to view/stream content that I’ve already purchased, Wi-Fi must be on. Effectively want Amazon is telling me is that I have to unlock Wi-Fi every time my child wants to view content that’s already been purchased…and once they are streaming content, I have to watch them watch it so that they don’t go looking for something else.

But, as I said, let’s forget this and the fact that its backwards.

The unlocked device represents a huge security hole. Amazon needs to address this with a software update and needs to require the account holder’s Amazon password for all purchases and not for Wi-Fi access. Until it does, Kindle Fire, and really ALL Kindle owners, need to be careful about where they store their Kindle, who has access to the device, and who is using it. You could find yourself the recipient of a HUGE content bill if your kids, or worse, a thief, happen to get a hold of your device and make unauthorized purchases.

NOTHING you can do, either on the web site or on the device, aside from crippling it, can prevent unauthorized purchases; and this is clearly documented by a number of different complaints and posts in Amazon’s own forums.

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