Analyst: Cheaper, Better iPhones in June, Apple Even Richer

[Paul Daniel Ash]

Saying that price is the "biggest barrier" to the iPhone growing in popularity, a financial analyst predicts lower-priced iPhones in the model's expected refresh this June. Morgan Stanley analyst Katy Huberty also said that the new model will feature new technology, including what is vaguely referred to as "gesture-based functionality," and that this could propel Apple stock to as much as $435 per share (it is selling at $202 as of this writing). In a separate report, a different analyst predicted that half of Apple's revenue in 2010 would come from iPhone sales.

Apple's pattern has always been to drop the price of existing models whenever they upgrade the line. Last year, for example, the price of the iPhone 3G dropped to $99 in the US when the 3GS came out, featuring video recording, a compass, line-speed encryption, voice control, etc. In her report to clients today which was revealed by the Fortune Brainstorm Tech blog on CNNMoney, Huberty released the completely unsurprising resuts of a survey that most people hesitated buying an iPhone because of its price, especially where there is no carrier subsidy. She claimed that Apple could get up to 10% of the mobile phone market worldwide by dropping what is called the Total Cost of Ownership (TCO) of the phone, which would include things like initial purchase price, wireless plan and repair. Huberty also told her clients that she anticipates Apple to sell 6 million iPads this year, much higher than Wall Street's consensus of 3 to 4 million.

Separately, Toni Sacconaghi, an analyst with Bernstein Research, in a note to investors reported by the Barron's Tech Trader Daily blog, said that Apple is on track to sell 45 to 50 million iPhones this year, which would be more than double the 20.7 million iPhones sold last year. This would bring in 45 to 50% of Apple’s total revenue, up from 30% in 2009. Sacconaghi also predicted that Apple will sell 2.2 million iPads in 2010 and 6.8 million the following year.

Even by the lowest estimates, Apple is poised to make a wad of money in the coming couple of years. The company is already sitting on a cash pile of about $25 billion US, and sources present at the Apple shareholder meeting this week reported that Steve Jobs said he doesn't intend to use the money to buy back stock or pay dividends to investors. Instead, according to the mercurial CEO, the cash will be used for "big, bold moves" such as acquisitions of new technology. “We are a large enough business now that, in order to really move the needle, we have to be thinking pretty bold," he said.

[Carlos]

Uno!!

So dose this mean there is a definite 4G coming up this summer??

[TheOnlyest]

Suddenly I feel sick to my stomach....

[hollow0]

I like what i've read within the last paragraph. I hope they do make "big bold moves".

And Paul, you sure do have some funny pictures for your articles lol.

[Bluprint]

The picture sorta reminds me of a scene in the dark knight when the Joker burns his half of the money and then goes off to terrorize everyone for pleasure...

The iPad is a game changer folks, why so serious?

[odoggy75]

The 4G iPhone will be the iPad killer.

[Tylervalo]

So, anyone think it might be a good idea to jump on some apple stock right about now?

[The Maestro]

The current $199 tag isn't bad and I don't want it lowered, they need to lower the rate plan cause that's what would keep any logical person away from the iPhone

But if they had to make a $99 version they should make it in **** brown so everyone knows who the cheap bastards are

[SirTimothy1]

So, anyone think it might be a good idea to jump on some apple stock right about now?

I'm so glad I bought some when it was $90

[MikeT674]

Suddenly I feel sick to my stomach....

agreed...maybe its the sandwich i just ate though lol

[MacJax50]

10-1 apple will eventually either start there own wireless or data company and or aquire AT&T. That's why there staying exclusive ..

[MikeT674]

10-1 apple will eventually either start there own wireless or data company and or aquire AT&T. That's why there staying exclusive ..

hmmm interesting

[MetallicaFan1991]

Uno!!

So dose this mean there is a definite 4G coming up this summer??

Well obviously, all the popular Apple products, MacBooks, iPods, iPhones are updated on a yearly basis.

[MikeT674]

Uno!!

So dose this mean there is a definite 4G coming up this summer??

their will be a new iPhone but chances of it actually being 4g capable i doubt it

[dale1v]

I'm so glad I bought some when it was $90

As I do economics as a degree now, I kick myself for not buying stock when I was 10 years old.

[tcschrader]

The current $199 tag isn't bad and I don't want it lowered, they need to lower the rate plan cause that's what would keep any logical person away from the iPhone

But if they had to make a $99 version they should make it in **** brown so everyone knows who the cheap bastards are

I'm kind of afraid that the cheaper the iPhone gets, the more people who have actually had one or two the last 3+ years are going to keep having their rate plan jacked up (original to 3G rate plan increased 10 dollars and I don't even get 3G in IOWA CITY!)

[Luppin]

I think lowering the price of the 3G to $99 already VASTLY increased the amount of people with iPhones. When I bought my 3G at launch, up until the price drop of the 3G I was one of maybe 3-4 people I knew who had one. Once the phone became as cheap (sometimes cheaper) as every other smart phone out there, EVERYONE got one. I can't go through one day without seeing at the very least 15-20 other people with iPhones, it's basically the new Razr. The individuality is gone, which isn't really too much of a big deal for me because I never bought it as a status symbol, but since Apple products as a whole (aside from the iPod) have always given off an impression of being outside the norm, "cool", and different, the iPhone barely fits in with the other Apple products anymore.

[Conas]

The question isn't whether or not there will be a 4th generation iPhone, the question is "What will they call the 4th generation iPhone??"

iPhone 4G - Nope. Totally implies there's a 4g network. The 2nd generation was called 3G
iPhone G4 - I've read some people call it this already, and I don't know if it's a typo or not, but I like the ring to it
iPhone A4 - Perhaps. I dunno how big their new chip is, but maybe it can fit in the iPhone?
iPhone 3GS2 - I hope not

[UKFitch21]

I'm totally digging the 2 watches Jobs seem to wear now

[lolcats1]

i hope the ipods are cheaper. that'd be a good thing cause ipods are a one time expense. as for the name.

i'm thinking 3gsuperfast or some such nonsense.