Ina Fried

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Last Year’s “It” Phones Find New Life as This Year’s Midrange Models

In an effort to shrink their product lines, smartphone makers are increasingly focusing on two segments of the market: The high-end flagship models and the entry-level devices that can be sold for next to nothing with a contract or for a reasonable price at a prepaid carrier.

In years past, most phone makers also developed a host of models aimed at the mid-tier of the traditional carrier market. Increasingly, though, that market is served by cutting the price of last year’s top-of-the-line model.

“The mid-tier is totally gone,” HTC President Jason Mackenzie said in an interview last week. “The new mid-tier device is last year’s hot model.”

The move has some long-term benefits for phone makers, who are have struggled to manage having a host of expensive products with a very brief life span.

However, the shift also means some short-term pain, particularly for all the companies that aren’t Apple or Samsung.

Eventually, Mackenzie said, the shift will benefit other companies, including his. But at the moment, HTC is struggling, as none of its models from last year have the same cachet as the iPhone or Samsung Galaxy S III.

Apple really kicked off this trend when it kept the iPhone 3GS in its lineup even after the introduction of the iPhone 4. Then, last year, the company introduced the iPhone 4S, and kept both the iPhone 3GS and iPhone 4 on store shelves, effectively expanding to new price segments without developing any additional products.

It will be interesting to see if Cupertino continues the trend by keeping around the iPhone 4 and iPhone 4S even as it announces its newest model on Wednesday. One indication that it might well do that is the fact that some carriers are just now getting the iPhone 4 and 4S.


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