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Absolutely Terrifying News for Apple

Stocks in this article: AAPL VZ

NEW YORK ( TheStreet) -- It came in the third paragraph of one of Chris Ciaccia's Apple (AAPL) stories this morning on TheStreet.

As he detailed Verizon's (VZ) four million iPhone quarter, Chris noted that 3G iPhones (the 4 and 4S) make up roughly half of that number, leading him to interject:

This may also be another sign that Apple needs to come up with a cheaper iPhone, unless it can demonstrate major innovations to the devices. People want to own Apple products, but they are not willing to pay for them if there isn't a perceived reason to do so.

Think about it. You're a rank-and-file smartphone customer. You walk into a Verizon store. You compare iPhone 5 side-by-side with the 4S and 4. Chances are you would be in the Apple Store or at making the purchase if you absolutely needed to have the latest model. Obviously, plenty of rational people have decided that, to save a few bucks, they would take an older model.

As somebody who doesn't think every new iPhone needs to be revolutionary, there still has to be something to get excited about. For as much as I love my iPhone 5, there's not even a real deal of evolution between it and its predecessors.

So, yeah, is an "officially" cheap iPhone the answer here? I hope the heck not. If it is, my talk about blowing out Tim Cook might become widespread among Apple fans and the media sooner than even I expect.

Consider the implications here . . . consider what smart people like Chris are putting forward regarding what Apple might do next to dig itself out of this ditch. If that's really the position Apple now operates from, they're doomed to perpetual mediocrity, relative to their otherworldly existence of the past five-ish years. A cheap iPhone.

As an Apple fan, I'm terrified. But I hold out hope that my more bullish thoughts -- truly re-evolution-ary advances in Siri and Passbook across products and a premium-priced, high-quality piece of hardware for the living room -- come to, rendering all of this legitimate concern little more than noise and hysteria.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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