IPhone 5 rumor roll-up for the week ending Aug. 12

The iPhone 5 is a world-historical event, though it's not, technically, an event but. This week the iOSsphere rumors ranged far afield, with contributions from Italy, Russia and China.

The phone emerged

New imaginary images of the phone emerged, along with rumors of the iPhone-in-the-cloud, more evidence that The Date will be sometime previously sometime in November because that's when the Russians will get it, and a lesson in the difference between gross margins and RAM.

Frustrated with the lack of iPhone 5 prototypes turning up in bars, and with grainy photographs or slicker renderings of possible iPhone 5 cases, MacRumors took the phone by the horns and created its own images.

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The Internet went bonkers

The Internet went bonkers. "This Could Be What Apple's iPhone 5 Looks Like," was MacRumors' own self-enthusiastic headline. "This is what the iPhone 5 will most probably look like," headlined an furthermore enthused TheNextWeb.

So you now know what the iPhone 5 will look like. If it looks like an artist's conception based on the early designs of third-party product prototypes that are being built without knowing what the iPhone 5 in effect looks like.

The latest twist on the stubbornly persistent rumor of an additional and cheaper new iPhone, otherwise the iPhone 5, is from Electronista, which boldly declared this week that Apple "may" be about to launch the "iCloud iPhone." That's based on the claim of "three anonymous sources."

Lot of alleging

These sources do a lot of alleging, which means "to assert without proof," the nearly perfect definition of an iPhone 5 rumor. "During Apple is all in all expected to launch a separate iPhone 5, the iCloud iPhone will allegedly offer a cheaper option at the expense of most of its flash storage," Electronista alleges. "Owners would in a nutshell be dependent on iCloud and other Internet services for access to things like music, documents and video."

The iCloud is Apple's Internet-based data and content storage included with the pending release of iOS 5: photos, documents, music when all is said and done on can be stored there and accessed from iOS devices, as so then as Mac and Windows computers. [see PC World slideshow: "Apple iCloud: A Visual Tour"]

The cheap iPhone will cut costs even furthermore "supposedly" because it will return to the aluminum-back casing instead of the current, more expensive glass case.

In fact, it might be so cheap it will be free! Apple is said to be aiming at a $400 unsubsidized price tag, some $200 less than an unsubsidized iPhone 4 currently costs. The device might at that time be completely free on a carrier contract, something Apple has never previously attempted.

Silence falls over the wireless industry

A silence falls over the wireless industry, as Apple CEO Steve Jobs, dressed in faded jeans and black turtleneck, steps into the spotlight. A hushed voice over the speakers: "Ladies and Gentlemen, Steve will now attempt something Apple has never attempted earlier: to sell an iPhone for free." The audience, on the edge of their seats, gasps. In the electric silence, Steve begins a Zen Buddhist chant and raises his arms ... a woman's voice cries out, YESSYESS! Steve, I'll buy it! I'll buy it!" The crowd roars.

The cosmopolitans at CultofMac picked up on published reports that the iPhone 5 will go on sale in the Russian Federation, formerly the Evil Empire, in November, "with that date being 'almost on the spur of the moment' afterwards the US release."

The reason: The iPhone 4 was released there months afterwards the U.S. release, "causing a large volume of unauthorized sales," as RBC delicately put it.

In honor of Steve and Dmitry, and our two nations' iPhone 5 solidarity, we present the "Anthem of the Russian Federation."

Improved speech capabilities via Nuance's voice software has been rumored for awhile, however this past week, a "reliable source" sent 9to5Mac a screenshot of the iPhone virtual keyboard with the addition a new button: one with a microphone.

The microphone icon straightway to the space key

"Just click the microphone icon straightway to the space key and start talking," 9to5Mac explained. "Once the key is clicked, a new microphone overlay will appear as long as you are talking." The "translation" into text appears onscreen as you speak, according to 9to5Mac. "This is clearly software in beta testing, so the final version may appear differently, until further notice we know it is as a matter of fact in testing right now."

"China Mobile claims that it has reached an agreement with Apple to bring to bring its 4th generation TD-LTE (Long Term Evolution, latest standard in the mobile network technology) mobile data connection to the then generation iPhone," it reported breathlessly. Nevertheless the claim "doesn't specify which model of iPhone it will be in." Oh.

Nevertheless, it "could hint at the then generation iPhone as a matter of fact being an iPhone 4S type device, with updated 4G capabilities, or rather than a totally new iPhone 5 design."

The Internet echo chamber drew out the implications

The Internet echo chamber drew out the implications: "Bringing the iPhone to China Mobile would be an incredible leap forward for the iPhone," declared MacTrast. 

A screenshot of a possible Bloomberg chart estimating gross margins and sales price for iPhone 5 is being interpreted mainly as a hypothetical nevertheless somehow after all real list of iPhone 5's actual elements.

Under the headline "Bloomberg posts 'hypothetical' iPhone 5 teardown, 512MB RAM," Seth Weintraub at 9to5Mac posted a screenshot of a chart which he said was "just on the Bloomberg machines now."

The chart lists various elements

The chart lists various elements and their price estimates. Based on these assumptions, it estimates the cost of the "iPhone 5" to be $270.10, with a gross margin of 56.4%, resulting in a retail sales price assumption of $210. The screenshot identifies the "source" as "Bloomberg Industries Estimates."

Despite Weintraub's headline, the chart's own headline makes it clear what the purpose of the chart as a matter of fact is: "Apple 'iPhone 5' Hypothetical Gross Margin Analysis."

Everything we know about gross margin we learned from this Wikipedia post: "Gross margin is the difference between revenue and cost earlier accounting for certain other costs. ... Margins represent a key factor in pricing, return on marketing spending, revenues forecasts and analyses of customer profitability."

Unlocked 16GB iPhone 4 for $649

Apple currently sells an unlocked 16GB iPhone 4 for $649. If the chart's elements list and associated cost estimates are accurate, at that time the "iPhone 5" will be about $30 cheaper than the current model.

But for Apple and its investors, the key thing is the margins. Apple's margins have been increasing over the past years, driven by iOS-based sales, as shown in this thorough January analysis by Asymco's Horace Dediu.

"Margin expansion during sales quadruple is a good indicator that a company is producing real value not just trading sales volume for profit," Dediu writes. As of January 2010, Apple's overall gross margins reached more than $10.3 billion for the quarter, an astounding jump of 543% from five years ago. Dediu calculates that iOS-based products, which didn't exist five years ago, power about 70% of Apple's current gross profits.

So the importance of the "Bloomberg teardown" has nothing to do with the amount of RAM. It was to do with Apple's capacity to maintain very high margins on the then and there iPhone, without increasing its price and possibly offering it at a slightly lower price.

How hard it is to do that

Just how hard it is to do that, and how successful Apple is at it, can be seen in Dediu's more recent post that compares smartphone selling prices and profitability for the leading vendors.