updated 09:35 pm EST, Mon November 10, 2008
iPhone France price rumor
Orange France is rumored to be reducing its iPhone 3G prices to 100€ (~$125 USD) for the 8GB model and 130€ (~$165 USD) for the 16GB variant, according to a post on the French Mac enthusiast site MacBidouille. The change is claimed to happen on November 13th, and would make the devices significantly cheaper than the US market offerings. Presumably the prices represent the two-year contract prices, dropping from the current 150€ and 200€ tags for the 8GB and 16GB phones, respectively.
If the rumor is true, it is unclear whether the change comes as the result of Apple lowering equipment cost, Orange restructuring its subsidies, or a combination of both. Charlie Wolf, an analyst from Needham Research recently considered the possibility of a $100 iPhone in the US. Apple would need to drop its gross margin on each sale from an estimated 50 percent to 42 percent, although the strategy could result in a multiplication of current sales numbers.
The US market has seen the sales of certain devices fluctuate and compete for the top-selling positions as companies drop phone prices and carriers adjust subsidies. The timing of the Orange France change would coincide with holiday promotions. Hitting low price-points could be a key strategy for many companies that battle for sales in the sluggish economy.