Analyst: Apple could drop iPhone 3G 8GB to $99, triple sales, relegate BlackBerry to niche status

“Apple has the room to cut the price of the iPhone to where it could take command of the smartphone market, analyst Charlie Wolf of Needham Research says today in a research note,” MacNN reports.

“The financial expert estimates that the average, unsubsidized price of an iPhone 3G in the summer was $666 and so would give Apple a nearly 50 percent gross margin on each sale as well as a heavy subsidy from AT&T of $450,” MacNN reports.

MacDailyNews Note: The Apple I, designed and hand-built by Steve Wozniak, was Apple’s first product. It went on sale in July 1976 for $666.66.

MacNN continues, “Both give Apple a large amount of space to adjust its price and could see the phone maker drop the price of an 8GB iPhone to $99 while still supplying a comfortable 42.3 percent margin.”

MacNN reports, “Any such price drops would be potentially devastating to competitors in the market, according to Wolf. The analyst believes that a $100 cut in the iPhone 3G’s advertised price could ‘double or triple’ projected sales and quickly overtake most other smartphones on the market and leave only successful but ‘niche’ smartphone manufacturers like Research in Motion, which produces the BlackBerry.”

Full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

36 Comments

  1. Why would they want to do this? Do you analysts not realize yet that AAPL does not see itself as a modern day Microsoft, RIMM or Google?

    Quality should never be compromised for a quick buck, after all “You gets what you pays for!”

    But then you analysts are hit whores aren’t you? anything for a quick hit and higher ratings will do you just fine. Everyone else beware….the more you hit their sites, the more speculative rubbish they will spout.

  2. just like the macbook was going to be $800.

    analysts blow- same song different tune.

    They don’t learn when they are wrong the first time- just try the same stupid prediction in a different way. What a dumb jack off.

  3. @AL

    You certainly hit THAT one on the head! As for Apple dropping the price to $99, why would it? Until it can move the device to all existing networks, including Verizon, T-Mobile, Sprint, and the like, the company has all it can handle right now! Keep those margins up, AAPL!

  4. Why drop the price when it’s obvious people are willing to pay more for what that are starting to realize isn’t a phone at all, it’s a handheld computer.

  5. I didn’t think Apple would get where they are today, topping BlackBerry sales and reaching who knows where on the new smartphone market share charts, until they got to that $99 price point.

    Now I can’t even imagine the havoc a $99 iPhone would wreak.

  6. Seriously? Can’t wait to buy my $800 Macbook Pro and my $99 iPhone. AT&T;can’t afford to continue indefinitely to subsidize each iPhone to the tune of $450. Best play on this? Unilever. maker of vaseline – sales to at&t;going through the roof…

  7. whenever I tell an acquaintance the current price of an iPhone, after showing the
    how cool it is, they all say Really? As they realize that they could afford one of these ultra-cool gadgets. I have had several friends buy them and several others are incubating! No need for a price change.

  8. But, according to Ballmer, “the Motorola Q is only $99”.
    I think it would be better if the iPhone dropped across the board in $29 increments…make ’em sweat. Then, their competitive adjustments to Apple’s adjustments would benefit consumers, as we already pay a huge monthly subscription for cell phones already. We aren’t even competitive banddwidthwise to the rest of the world. Don’t expect iPhone sales in Japan and South Korea to skyrocket virtually ever, as WiMax is already in Seoul. Can you say true mobileTV???…I thought you could.

  9. Oh boy. Yeah that would be great! Lower the price below the price of an iPod Touch, or even a classic iPod. This is why these kinds of people don’t work at Apple, or can successfully predict what the stock market will do.

    If your selling iPhones like hot cakes at the present price, why on earth would you need to lower the price on them? This guy is an idiot.

  10. iPods are a CE commodity now (except for the iPod touch). Most mobile phones are now commodities.

    Are smart phones commodities yet. No! Will they be sometime? Very probably.

    At that time Apple can start hitting lower price points just as they did with the various iPods. Till then, keep the margins as high as possible.

    But note! Jobs said that he didn’t want to create a price umbrella for competitors to enter the market.

    John

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