“Next week, Apple Inc. CEO Steve Jobs is expected to announce the next iteration of the company’s iPhone at Apple’s annual developer conference,” Phil Carson reports for RCR Wireless News. “In the run-up to the purported announcement, several issues have been bandied about by the global media, which has been fascinated by the device and its disruptive effect on the cellular industry — effectively creating the buzz that Apple’s PR department could never deliver.”
“One of the most-discussed issues is whether AT&T Mobility — and, conceivably, other operators across the globe — will subsidize the device to a disruptive price point from its current perch at $400 and $500, for 8 GB and 16 GB models, respectively,” Carson reports.
“Recent, general remarks about the efficacy of subsidies by AT&T Inc.’s CFO Rick Lindner on May 22 at a Reuters conference in New York further fueled speculation on the issue. Media speculation has focused on possible iPhone pricing as low as $200. Neither Apple nor AT&T Mobility have publicly, directly addressed the topic,” Carson reports.
“Analyst Roger Entner at Nielsen/IAG, however, dashed some cold water on the notion of near-term subsidies last week,” Carson reports,. “‘There’s no need to upgrade the device’s capabilities and lower its cost at the same time,’ Entner said. ‘AT&T Mobility first will have to see the effect that a 3G iPhone will have on its HSDPA network. Right now, that HSDPA service is robust, with only a few million laptops riding on it. Add a few million iPhone users, who are heavy users of the Internet, and it could be like shaking a skyscraper. AT&T Mobility is not just selling a device, it’s selling a service. AT&T Mobility doesn’t want complaints about its service. That would spell out no abrupt price subsidy for the device.'”
Carson reports, “An iPhone subsidy, should one be contemplated, would represent ‘a secret weapon for Christmas’ should Apple and/or AT&T Mobility determine that they need to gin up device sales to reach or exceed Apple’s 10 million-unit goal by the end of 2008, Entner said.”
Full article here.