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$99 iPhone coming after all, claims analyst

updated 11:45 am EST, Tue February 10, 2009

$99 iPhone still coming?

A cheaper iPhone will debut sometime this summer, according to RBC analyst Mark Abramsky. Citing checks, Abramsky says the device will not be a rumored iPhone nano, but instead a pared-down regular iPhone. The model could omit 3G and GPS functions, reduce camera resolution, and impose a cap on data usage; the tradeoff, however, would be a $99 entry price, attached to a lower-cost data plan, worth approximately $15 per month.

The flagship iPhone 3G is expected to get a number of potential upgrades, such as a maximum 32GB of memory, a combination video and still camera with more resolution, and a display supporting a higher 720x480 resolution. Both the high- and low-end devices would theoretically ship in June or July, the same timeframe as Apple's past two iPhone launches.

The $99 model may also require a lower subsidy from cellular carriers, valued at $200 instead of the $400 pegged to support the iPhone 3G. Abramsky suggests that as many as 20 to 30 million low-end phones could be shipped in FY10, boosting Apple's smartphone marketshare to nearly 20 percent. The analyst worries however that Apple may need to sell three cheap iPhones to equal the gross profit of a single iPhone 3G, and that gross margins in 2010 could slip from over 50 percent to around 35 to 37 percent.




by MacNN Staff

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Comments

  1. Eriamjh

    Joined: Dec 1969

    +6

    Reduce Cam res?

    Is 2MP a lot? I don't think so.

    Drop the 3G and GPS and you have an iPhone 1G. The current camera sucks anyway.

  1. Monstermind

    Joined: Dec 1969

    +3

    s**** the Camera

    Keep the wifi.

  1. rytc

    Joined: Dec 1969

    0

    agreed

    How can you reduce the camarea on the current phone?, it is c*** and is not a selling feature in itself. If the new ones had 5MP cameras and the $99 kept the current one, that is one thing but beyond removing the current one it is hardly possible to scale it down.

  1. dom2cool

    Joined: Dec 1969

    +4

    just

    keep the functions of an ipod touch but one that can call and has a camera. i would say that would please most people on average use any way.

  1. Zaren

    Joined: Dec 1969

    +7

    Almost palatable

    $99 for the phone and $15 a month data plan would be something I could stand... if they make it pre-paid for the phone service. I'm still too cheap and poor to go all-out for a full-service iPhone.

  1. cyn1c

    Joined: Dec 1969

    -2

    So was Apple lying...

    when they said they had no interest in putting out a lower end phone?

  1. dwoodruff

    Joined: Dec 1969

    +4

    well

    This is the opinion of an analyst. According to analysts, Apple stock should be over $250 right now...

  1. Guest

    Joined: Dec 1969

    +3

    just re-release the 1st

    The original iPhone fits the specs perfectly. Just release it and sell it for $99. It still has the $20 data/SMS plan as well. That's the main reason I never upgraded to the 3G model :-)

  1. Peter Bonte

    Joined: Dec 1969

    -3

    storage

    The price differentiator in the current model is the storage and it works great, no need to complicate this. It would also make it much more confusing to buy apps if there are different models.

    Developing a 'cheaper' version next to the current model can make it more expensive to produce and not cheaper, Apple could easily drop the price of the current model and use storage and/or color for the different prices.

    The only new model we need next to the Touch and iPhone is a bigger tablet model, no need to make it more confusing than this.

  1. testudo

    Joined: Dec 1969

    -9

    Re: storage

    It would also make it much more confusing to buy apps if there are different models.

    It doesn't seem to confound people now, with an iPhone 1stGen, 2ndGen, and iPod Touch.

    And this analysis apparently implies that, somehow, the 3G chip and GPS cost close to $100 by itself. Right...

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