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Piper: iPhone 3G price cut deep, to affect revenues

updated 05:05 pm EDT, Mon June 9, 2008

Piper on iPhone 3G

The price cut for the iPhone 3G was deeper than expected, says analyst group Piper Jaffray. Moving the base price to $199, it is fact said to be 50 percent greater than predicted by The Street, a factor which Piper believes will contribute to high CY08 shipments of 12.9 million units. Also significant is that iPhone availability will expand from the present six countries to 22 by July 11th, and as many as 70 countries within the "next several months," according to Apple.

After today's WWDC keynote, however, Apple is said to have revealed that the majority of carrier partners will not share revenue past the initial unit sale. Instead the company is asking partners to subsidize the iPhone's price, which Piper believes is a gamble made with the expectation of compensating unit numbers. The true payoff may be in 2009, which Piper argues will be a "breakout year" for the iPhone, with a complete family of devices launching by January.




by MacNN Staff

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  1. Paul Huang

    Joined: Dec 1969

    +3

    Don't be a s******!

    The data plan went up by 50% ($20-->$30), so instead of paying $480 over a two-year contractual period, you need to fork out $240 extra. (Or $720 more than a plain-wrap voice line.)

    $399 vs.
    $199 $240 = $439

    I don't know how the accounting works, but there is not going to much long-term impact.

  1. BelugaShark

    Joined: Dec 1969

    -9

    I hate to say this

    but, SJ keynotes are beginning to sound like a broken record. To be honest, Apple customers were expecting much more today than 3G and GPS in a phone, they should've been embarrassed to announce these as the new features. How about voice-dialing, video recording, a new Mac for Gods sake, a mid-range Mac, or something that we need and have been requesting since the beginning of time, like a better Finder.

    Hey... but guess what? we'll get an improved version of Leopard in 12 months, wow! that's something to look forward to... /sarcasm

    Comment buried. Show
  1. Paul Huang

    Joined: Dec 1969

    -12

    Leopard = Vista

    Both of them are the most unworthy upgrade ever.

    Comment buried. Show
  1. Paul Huang

    Joined: Dec 1969

    -12

    Leopard = Vista

    Both of them are the most unworthy upgrade ever.

  1. vasic

    Joined: Dec 1969

    +4

    Margins?

    I am curious to find out if $200 covers the manufacturing cost. The original device was estimated to cost about $220 in parts and labour. If this one cost the same, then it will probably not be possible to walk out of a store with an unactivated phone, unless an arrangement has been made to automatically charge the buyer some additional money unless the phone is activated on the subsidising carrier (sounds too convoluted).

    Let's wait until the fog clears a bit.

  1. vasic

    Joined: Dec 1969

    +5

    Margins?

    Two different sizes - 8GB and 16GB look extremely like last year's choices (4GB and 8GB). If anyone remembers, the big one significantly outsold the little one back then. I will not be surprised if the same thing happened this time around. That way, we'll definitely see healthy profit margins on these little devices.

  1. Loren

    Joined: Dec 1969

    +4

    better phone

    Voice memo and video recording will come from SDK developers, it;s a perfect niche for them.The AT

  1. Loren

    Joined: Dec 1969

    -7

    better finder??

    The AT

  1. eldarkus

    Joined: Dec 1969

    +2

    margins

    Remember that Apple got a kickback from ATT for new subscribers. I have to wonder if there is some type f trade off for that. i'm sure production costs are lower than a year ago.

    As far as the data plan. Wouldn't that be like paying for $30 DSL and trading up to FIOS for $60? Well worth the cost upgrade IMO!!

  1. eldarkus

    Joined: Dec 1969

    -1

    margins

    Remember that Apple got a kickback from ATT for new subscribers. I have to wonder if there is some type of trade off for that. Maybe instead of a kickback for subscribers, they get them for phone sales. I'm sure production costs are lower than a year ago.

    As far as the data plan. Wouldn't that be like paying for $30 DSL and trading up to FIOS for $60? Well worth the cost IMO!!

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