Analyst: $99 iPhone Feasible, Would Spell World Domination

Edward Kirk · October 27th, 2008, 02:03 PM

Analyst Charlie Wolf with Needham Research released a research note earlier today that Apple may be wise to slash the price of the iPhone down to $99. He suggested that the company has room to do so financially, and the new, drastically more affordable device would allow them to take control of the smartphone market.

He estimates the average unsubsidized price of the iPhone during the summer to have been $666, giving Apple a 50% gross margin on the device when balanced with the sale price and a hefty $450 subsidy from AT&T. He believes that that, combined with their dramatic growth in non-GAAP revenue (wiki) Apple would do good to decrease that margin to make the iPhone more affordable.

At this stage, he claims that a $100 price cut in the device would be a devastating blow to competitors, a prospect that seems all the more likely (if not somewhat unnecessary) since it's already outselling all other smartphones in the US.

[via Electronista]

MikeB · **4gb** - October 27th, 2008, 02:52 PM #2

And if they did it by reintroducing a 4GB model, they wouldn't even make all the millions who'd already bought an iPhone mad.

madscientest · October 27th, 2008, 06:37 PM #3

Quote:

Originally Posted by MikeB

And if they did it by reintroducing a 4GB model, they wouldn't even make all the millions who'd already bought an iPhone mad.

well put! i can see how that would piss off a lot of people. it seems that these days the iphone is only worth that much anyways. espically with the lack of all the features that people really want, like mms, copy paste and of course bluetooth audio.

xtremeyouth1 · **Not likely** - October 27th, 2008, 10:14 PM #4

If Apple decided on a $99 model they would probably drop the 8gb to $99, move the 16gb to $199 and introduce a 32gb at $299. Nothing would happen before next year. The biggest factor for me that would cause me to upgrade would be on the feature side ( video camera, 5 megapixel camera, wimax, etc.). At $199 it is clearly the best phone out there already and all I would need is just some tangible reason to justify my upgrade.

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Edward Kirk WrAdminterizer Join Date: Apr 2007 Location: Illinois, USA Posts: 3,084 Thanks: 19 Thanked 26 Times in 25 Posts	Analyst: $99 iPhone Feasible, Would Spell World Domination - October 27th, 2008, 02:03 PM #1
	<script language="JavaScript" src="http://adserver1.backbeatmedia.com/servlet/ajrotator/13894/222/viewJScript?pool=13886&type=3158&pos=20&zone=5000"></script> Analyst Charlie Wolf with Needham Research released a research note earlier today that Apple may be wise to slash the price of the iPhone down to $99. He suggested that the company has room to do so financially, and the new, drastically more affordable device would allow them to take control of the smartphone market. He estimates the average unsubsidized price of the iPhone during the summer to have been $666, giving Apple a 50% gross margin on the device when balanced with the sale price and a hefty $450 subsidy from AT&T. He believes that that, combined with their dramatic growth in non-GAAP revenue (wiki) Apple would do good to decrease that margin to make the iPhone more affordable. At this stage, he claims that a $100 price cut in the device would be a devastating blow to competitors, a prospect that seems all the more likely (if not somewhat unnecessary) since it's already outselling all other smartphones in the US. [via Electronista] __________________ About my iPhone: iPhone & Color: iPhone 3G 16GB White iPhone Version: 3.0 Computer & OS: MacBook Pro 15", Mac OS X 10.5.4 Twitter

MikeB Forum Lurker Join Date: Oct 2008 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts	4gb - October 27th, 2008, 02:52 PM #2
	And if they did it by reintroducing a 4GB model, they wouldn't even make all the millions who'd already bought an iPhone mad.

xtremeyouth1 Forum Lurker Join Date: Oct 2008 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts	Not likely - October 27th, 2008, 10:14 PM #4
	If Apple decided on a $99 model they would probably drop the 8gb to $99, move the 16gb to $199 and introduce a 32gb at $299. Nothing would happen before next year. The biggest factor for me that would cause me to upgrade would be on the feature side ( video camera, 5 megapixel camera, wimax, etc.). At $199 it is clearly the best phone out there already and all I would need is just some tangible reason to justify my upgrade.