RBC on cheaper iPhone

Long-standing rumors of a cheaper iPhone could see the persistence of the 8GB iPhone 3G, argues RBC Capital Markets analyst Mike Abramsky. Serving as an alternative to a new mainline iPhone, the 3G would retain the same specifications, but drop $100 in price to $99. The move could spur iPhone sales by as much as 30 to 40 percent, Abramsky suggests, adding 5 million units in FY09, and 22 million in FY10. Total iPhone sales for each year would be 18 and 28 million.

The next flagship iPhone is being dubbed the "iPhone 3G Pro," and is expected to sell in 16 and 32GB models for $199 and $299. Maximum bandwidth is forecast to jump to 7.2Mbps, while the CPU should rise in speed to 600MHz. Accessories such as a magnetometer and a video-capable 3.2-megapixel camera could round out major hardware differences.

Sales could gain another 20 to 25 percent boost, says Abramsky, should carriers introduce cheaper data plans. While this runs the risk of further burdening 3G networks, it is thought that AT&T's profits would greatly benefit if it launched a "light" iPhone plan limited to between 100 and 250MB per month, but at a cost of just $15 to $20 instead of the $30 for unlimited use.

A possible future piece of hardware, according to Abramsky, is the "iPhone mini," which contrary to past predictions would ship only in 2010, and on a pre-paid or SIM-less basis. This would make the device a better sell internationally, where fewer people are chained to contract subscriptions. It could also ease sales into more third-party phone distributors, which in foreign countries are more common than carrier stores.

by MacNN Staff