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Thread: Could $99 iPhone Rule The World?
10-27-2008, 09:33 PM #1
Could $99 iPhone Rule The World?
I found this article interesting.... but also had to laugh as well if Apple does this since there is so much competition out there right now...
Just when you thought things couldn’t get interesting enough, someone goes and says something crazy.
Apple has the room to cut the price of the iPhone to where it could take command of the smartphone market, analyst Charlie Wolf of Needham Research wrote today in a research note by way of Electronista.
According to Wolf, the average, unsubsidized price of an iPhone 3G in the summer was $666 and would therefore give Apple a nearly 50 percent gross margin on each unit (as well as a heavy subsidy from AT&T of $450). That’s a lot of wiggle room — so much, in fact, that the big Apple could drop the price of an 8GB iPhone to — take a deep breath now — $99 while still managing a comfortable 42.3 percent margin.
Hosanna, hosanna in the highest! the angels sung.
Electronista also notes that the company’s dramatic growth in non-GAAP revenue could also give Apple a significant amount of breathing space to play with the iPhone’s price by cushioning more substantial price cuts
But the bottom line is this: A price drop to such degree is a potentially devastating swipe at competitors in the market. Wolf writes that lopping off $100 of the iPhone 3G’s advertised price could “double or triple” projected sales and quickly overtake most other smartphones on the market, leaving only successful “niche” smartphone manufacturers like Research in Motion, which produces the BlackBerry.
Google Earth capability doesn’t hurt, either.
When an in-demand phone’s price drops, its spot on the sales charts usually rises, especially in the U.S., where subsidies are often not as steep as those in Europe. Case in point: Despite a strong launch, the iPhone 3G was outsold by Motorola RAZRs in the summer thanks to free or near-free pricing with many carriers. Even RIM is in on the action: BlackBerries have also taken two out of the top five positions in NPD phone sales figures for the summer as the Curve and Pearl began selling for $100 or less on certain contracts, Electronista notes.
So that brings me to a simple question: Could a $99 iPhone rule the world? (Or, for Android fans, could a $148.88 T-Mobile G1 rule the world?
Could a $99 iPhone rule the world? | The Toybox | ZDNet.com
10-27-2008, 09:55 PM #2
From an economic standpoint, they would be crazy to drop the price that low; well, any time soon. On a basic economic supply and demand model, if the demand is still rising (for the iphone it still is), then the price is just right, and they should be asking for no less. However, if in a few years they still have the 1st, 2nd, and 3rd gens still lying around, sure, sell it off for a marginal price drop. Steve bathes himself in iPods and iPhones, and wipes his butt with Mac Book Pros; and as we all know, that's an expensive life style to keep up.Viruses
10-27-2008, 10:35 PM #3
If they did rule the world.......You think they'd cut gas prices? That would be great...
Very interesting article. Dont know if I see Apple doing so...just because they are Apple...but it makes perfect sense.
10-27-2008, 10:50 PM #4
I read something where Apple has something like $25billion in the bank and no debt, selling the iphone for $1.00 would not hurt the company a bit and they would monopolize the cellphone industry. I wish I was like Forrest Gump and bought stock in something called Apple.
Read My Lips: Apple Is a Netbook Maker - Bits Blog - NYTimes.com
10-27-2008, 11:26 PM #5
^^Aside from the fact that they would be losing money with a price point of $1....and nobody's gonna do that.
10-28-2008, 12:08 AM #6
I could see Apple selling them for $99...... Apple has their ways to get around right now all the ups and downs....... that is why I had to laugh... Apple and their ways.... you never know what they will do next... one can only guess....
10-28-2008, 12:26 AM #7
Other companies compare all of their newest phones to the iPhone for a reason. The iPhone was cool when it came out. Out of the box. With the release of the appstore it became ubercool.
Setting a price of $99 is not very far fetched considering the state of our current economy. I don't see as many people justifying the current price anymore even with the subsidy.
Other companies are gunning for a piece of Apples pie so Apple would do well to keep a step ahead of other manufacturers as the newest of the new phones come out.
I am hoping the Sony Xperia comes to AT&T. That phone is the only phone right now comparable to the iPhone.
10-28-2008, 12:59 AM #8
I was also reading some where out here today that with the economy the way it is people are not going to upgrade their phones every 12 months, lower their minutes, take out landlines and some may even go without a phone.....
With all of this going on it would be cool of the companies would lower our monthly payments as well.... )
And it would be cool if Apple did this... and yes the appstore did it for them this year and what is others doing? Following Apple.....
10-28-2008, 07:50 PM #9
^^I agree 300% in regards to the carriers and their plan pricing. I think its crazy dumb what we pay for service.
Maybe, if this does actually happen...and the growth of wireless communication slows down they may think about it.
But I honestly dont see enough people doing that to make a difference....or at least Im not sure if I wanna see that happen, because (in my opinion) that would mean another big drop in the economy.
10-28-2008, 08:03 PM #10
Apple isn't doing anything that doesn't make them madd paper. No price cuts.
If it don't make dollars it don't make sense.
10-28-2008, 08:12 PM #11
A couple of thing would have to happen.
First they will need to improve their texting on the iphone. Its the only thing that lags behind my voyager, not the keyboard but the ability to send picture texts (not emails). The second thing would be opening up the distribution to other carriers.
I would expect the apps store would thrive but the free offerings may be fewer, less 99 cent offerings and more 1.99 apps
10-28-2008, 08:17 PM #12
I dont think txting will prove a biggie for a price reduction, and they cant distribute the iphone to anyone but AT&T as they have an exclusive contract with them...at the moment.
10-28-2008, 09:28 PM #13
Everyone talks about lowering prices cut to the economy but seriously. If one still has a job this should not affect normal expenditures. It's all about perception which then further drives people to pull money out of the market which worsens the condition.
I don't know about other places but here in southeastern PA prices are dropping. I saw gas selling for $2.72 the other day. It was close to $4.50. A couple of minus ago and still over $3.00 a few weeks ago.
We are in a volatile market for surebu we can't get worked up over the downturns. If anyone heard, the Dow was up almost 900 points today. Yes, it's way lower that a year ago, but like I said, if you are working, not an issue. If you have lost your job then probably you shouldn't be buying an iPhone at all and take the freebie phone that thecarriers love to "give" away for signing.
10-28-2008, 09:47 PM #14
^^HAHAHA, gas here has gotten down to $2.28
10-28-2008, 10:32 PM #15
Just read another article about it...
The Technology Chronicles : Would you buy a $99 iPhone 3G?
10-28-2008, 10:51 PM #16
^^I'd like to see some of the statistics for sales....I mean the real ones Apple sees
I wonder...with all the people who have purchased iphones...how much of a difference going from say $199 to $99 will make...cause it seems like everyone that is capable of getting one is, if not their just not interested in the phone....but you dont hear alot about it being a price issue.
Im not arguing anyone's point....just throwing that out there.
10-28-2008, 11:31 PM #17
10-29-2008, 10:47 AM #18
Right now I know about ten people that would love to get one but can't afford to spend $200.00 and then their first bill as it is always more.... and I really think the data plans is what the concerns are here.... if they were not as much then $200.00 for the phone I think they would swing.... they all work but things are very tight for them..... especially the younger couples I know......
Don't worry no one thinks you are trying to argue...
Last edited by thetoothfairy; 10-29-2008 at 10:54 AM. Reason: Added A Few Changes
10-29-2008, 03:28 PM #19
People lost savings and retirement savings.
The experts say wait out the storm. When you loose 40% of your savings its tough to sit back and say I will just wait in hopes it comes back.
The iPhone is mediocre for texting. With the voyager texting pictures, sounds and video is a breeze. On the iPhone not so. If they implement a better texting program, bump up the monthly fee $5 and offer the phone for $99 then I think the iPhone would capture a bery large market share.
10-29-2008, 03:39 PM #20
This is true, but that is what I was driving at when i said whether a phone is $99 or $199, if you are that money conscious, you wont be in the market for an iPhone anyway.
Yes losing saving and retirement funds sucks! While I'm young enough not to worry about retirement, My oldest is a freshman in college. My second is going to start next year. The year the oldest graduates, #3 will start. We were proud of their college funds and now am quite worried about paying for 8 straight years of tuition , 4 of which will be for 2 kids. We HAD it paid for. We are fortunate in that our current income is somewhat secure although we cant foot the tuition bill off it. Because we do still have something, the college aid still wont kick in. They expect the parents to clean themselves out. Our mistake was earmarking retirement funds in non 401K accounts so as far as FAFSA is concerned its fair game for tuition.
Oh well, everyone is in the same boat and I do count my blessings. So many others have it so much worse.