Apple Considering Differentiating iPhone Models by Software?

Register Hardware reports of a meeting between Apple senior executives and Yair Reiner, an analyst at Oppenheimer. The report stated that Yair Renier has said that:

"[The] iPhone is still in its early days and could gain share by: providing more functionality, lowering prices, growing geographically, or segmenting the market with different models."

The report has also stated that when Yair Reiner pressed the firm for further details, the staffers said: "Segmentation would focus on software." This brings the possibility of Apple considering offering different models of the iPhone which has identical hardware but different software. An example of how this would work:

Apple could market one 'YouTube' iPhone model with applications that provide video capture, editing and sharing features. Other iPhones might only offer basic video capture - or perhaps no video at all.

Selling models differentiated by hardware seems unlikely. Different iPhones with very different physical specs could have far-reaching implications for Apple's production methods, volumes and costs.