Lower-Cost iPhone for China is Part of a Clear Trend

New rumors about a more-affordable iPhone, intended for sale in markets such as China, illustrate an important trend in technology products, namely the awareness that billions of consumers around the globe want, can benefit from, and will increasingly be able to afford, communications and communications tools once largely used only in developed nations. 

The desire might be clear enough, though the challenges are equally clear. What economists or business strategists sometimes call "the bottom of the pyramid" refers to the largest, but poorest socio-economic group of human beings, globally.

That has at times meant there are four billion people living on less than $2.50 per day. In the past that might have meant an overwhelming sense of confronting an immovable barrier to economic and social development. That is changing, as a new global middle class emerges. Nevertheless, applying first world technology in a third world context is challenging. 

The point is that new models of doing business are required. The classic form of the challenge, in the global communications business, has been the problem of supplying basic voice communications to the billions of people who had, late in the last century, "never made a phone call."

Mobile communications has been the surprising answer. Similar concerns have been raised about the cost of computing appliances. But many would argue that the smart phone, or the tablet, will solve that problem. All of that largely means the "problem" of getting people Internet access also will be solved. 

Nor does one have to assume excessive altruism on the part of industry suppliers, either. The simple fact is that computing, communications and other Internet products can be effectively sold globally, to the "base of the pyramid," new markets measured in billions of users are possible. 

That's a big deal. The opportunity to sell billions of units to billions of new customers would be attractive under any set of circumstances. But the importance is heightened because of stagnant or saturated markets in many parts of the developed world. 

In fact, the cost of the device might not be so important as the service cost.

On the other hand, lower cost devices could have important repercussions in developed nation markets as well. Consider only the issue of device subsidies. A lower-cost iPhone would lessen the need for such subsidies. less