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June 1, 2009 2:31 PM PDT

More speculation about possible $99 iPhone

by David Martin

A recent post on Barron's Tech Trader Daily suggests that Apple plans to "attack the low end of the smartphone market" by offering a $99 version of the 8GB iPhone.

According to Barron's, RBC Capital analyst Mike Abramsky believes that Apple will reveal updated 16GB and 32GB iPhones at the Worldwide Developers Conference on June 8 (as expected), keeping $199 and $299 price points. The article suggests that "Abramsky thinks even an evolutionary upgrade will drive a healthy upgrade cycle; he estimates 20 percent of the 21 million iPhone-installed base will upgrade within the first year."

But the most interesting part of this report reads:

The company could leverage its component and manufacturing efficiencies by offering an 8GB version of the phone at $99, down from $199 currently. He thinks the result could provide a major lift to unit demand, with 5 million additional iPhones in FY 2009, and 22 million in FY 2010.

Additional information about this story was also posted at AppleInsider, reiterating the rumor that there will be new models of the iPhone, but that Apple would split the iPhone into regular and "pro" editions.

According to AppleInsider:

Next month's Apple Worldwide Developers Conference will see the introduction of an "iPhone Pro" that will sell for $199 and $299 with storage capacities of 16GB and 32GB, respectively. Inside, he [Abramksy] expects a new 3G wireless chip capable of connecting to wireless networks that support download speeds of up to 7.2Mbps, a 600MHz Samsung ARM processor, 3.2-megapixel camera with video capabilities, a magnetometer, and other features already found on the current iPhone 3G.

(Credit: RBC Capital Markets)

It is also noted that "Apple will continue to sell its existing iPhone 3G in an 8GB configuration, only pricing it down to $99 from $199 in a bid to broaden its share of the worldwide smartphone market, boost its multitouch install base, and poke holes in any price umbrella rivals may seek out in their own bid for market share."

The iPhone hasn't really been around long, and in order to gain market share, Apple may well consider introducing different models, lowering prices, adding more features, and growing geographically. (China would be a good place to start.) All this could be accomplished with a $99 starting price.

We know that you've heard the $99 iPhone rumor before--including after Walmart started selling the iPhone--and never seen it materialize. What do you think this time around? Would you be interested in a $99 iPhone? Share your thoughts in the comments.

David Martin has more than 20 years of experience in the industry as a programmer, systems and business analyst, author, and consultant.
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Add a Comment (Log in or register) Showing 1 of 2 pages (57 Comments)
by strongpimphand June 1, 2009 3:49 PM PDT
I refuse to have to be locked into contracts, and being forced to pay 70ish dollars a month for the iphone is laughable.

Shoot, my E71 on ATT's network is much cheaper (10 dollar medianet data plan)
Reply to this comment
by Dalmatian28 June 1, 2009 8:39 PM PDT
That is not the worst part! The worst part is that in the middle of 2009 Apple is introducing devices that use 400 and 600 MHz processors. That makes me puke! Qualcomm is selling 1000 MHz Snapdragon and are already testing 1300 MHz and 1500 MGz dual-CPU's. If there is one device that needs faster processor ...it is the iPhone. Even before it comes out...it is already outdated! 3.2 MP camera...what is this 2001??? Samsung and Sony-Erickson are introducing phones that are 12 MP. iPhone anyone???
by montex66 June 1, 2009 8:47 PM PDT
Refuse all you want. Nobody is forcing you to buy anything. And if you're happy with what you've got, then goodie-goodie gum drops for you. What exactly is your point other than you are too cheap to buy an iPhone?
by pickles319 June 1, 2009 11:27 PM PDT
@ Dalmatian:
Ok, right now there are only, what, 2 or 3 phones on the market that have 12mp cameras. 3.2 MP for a phone is considered ok, but not impressive. You are blowing things way out of proportion.
by man290663 June 2, 2009 3:11 AM PDT
Why the obsession with megapixels and phones - any phone is NOT an camera the image quality on a5 Mpix Camera is much better than as 12Mpix phone its about image quality not number of pixels. the sensors size and lens have more to do with quality than any number of pixels!! no matter what phone is used the pictures are slow and poor and only suitable for facebook!

If you want to use a Phone/PDA get a smartphone if you really want pictures or video buy a Camera..
by opinioncircle June 2, 2009 12:27 PM PDT
Agree completely. Apple better bring a better iPhone for $99. And yeah, another fellow E71 user :D !!!
by make_or_break June 2, 2009 6:03 PM PDT
Bah...so I'd have a one-time C-note saving yet still be on hook for AT&T's gawd-awful network for two years. This is supposed to make it worth it???

Give me an AT&T-free iPhone...then we'll talk. In the end it always comes down to the network, not the phone.
by mgheff June 1, 2009 4:05 PM PDT
Well, the cheaper one says 80+ carriers or countries. Now I may just be dreaming, but maybe Verizon? I am waiting for the WWDC to upgrade now. fingers crossed.
Reply to this comment
by senitel10 June 1, 2009 4:09 PM PDT
iPhone on Alltel:D
Reply to this comment
by mgheff June 1, 2009 4:33 PM PDT
Verizon owns Alltel btw...
by Petoskey116 June 1, 2009 4:24 PM PDT
Apple sucks, I wouldn't buy from them no matter what. They rip people off with their junk products.
Reply to this comment
by play7 June 1, 2009 6:04 PM PDT
Sadly thats been the case for for a very long time now. Wasnt that way years ago. But when Jobs came back thats when the apple geek fever started. Brainwashing mindes is a sad way to sell over priced under tec devices.
by tae27 June 2, 2009 1:12 AM PDT
hahaha

maybe if u actually used their products, u would think otherwise

i had many PCs and windows based laptops and they all broke down about a year and half...
my macbook is still running as new after 2 years
by Mikeybabes June 3, 2009 2:17 AM PDT
tae27, I think that is a bigger indictment on you than it is on PCs and Windows machines. Yes generally speaking Apple make quality products but you really pay for that premium.
by Surrylic June 1, 2009 4:44 PM PDT
I love my iPhone, and ATT is the best carrier in my area (people don't understand that carriers differ depending on their location). I don't like the monthly bill, but as useful as cool as it's been... I'll pay it I guess. If I could get a cheaper data plan I'd grab that immediately, it's hard to use that much data in even the cheapest plans for me.
Reply to this comment
by cardfan1212 June 1, 2009 5:03 PM PDT
I'm having trouble wondering what makes the other one an "iphone pro" since neither can handle multitasking and runs the same OS.
Reply to this comment
by happyslappy13 June 1, 2009 7:56 PM PDT
premium an "non"premium firmwares???
by Anf09 June 1, 2009 5:22 PM PDT
God I hope this is true. I've been waiting a long time. Apple will stay with AT&T, do not worry.
Reply to this comment
by play7 June 1, 2009 5:59 PM PDT
Meaning that it wil be open to add your own SIM reguardless of your provider? um..........Sure makes sence........Apple wants even more share of the phone industry.
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by philosophico June 1, 2009 6:46 PM PDT
There is only one problem with apples plan to grow. You cant have the phone locked to at&t. They need to put it the phone on every provider, im not flocking to at&t period, there coverage in my state is horrible and there plans are high.

You can only grow so much with one phone carrier. Signing a long term exclusive contract that lasts years = fail.
Reply to this comment
by darkpoet25 June 1, 2009 6:53 PM PDT
There has been talk that the contract with AT&T will be up next year. From rumored reports, it looks like it COULD be on Verizon once the exclusitivity with AT&T is over. I like my iPhone 3G, but having a phone on one carrier is almost suicide in this industry. That's why it lost the top spot to the Blackberry Curve, which is available across all 4 major carriers.
by mgheff June 1, 2009 7:24 PM PDT
good point. if the iPhone was on Verizon I would sure buy it.
by montex66 June 1, 2009 8:56 PM PDT
AT&T has an exclusive contract with Apple for 5 years. Do you know what EXCLUSIVE means? It means you won't be seeing the iPhone available in the US with other carriers until 2011. **** and moan all you want, but a business contract is not an easy thing to break, especially when hundreds of millions of dollars are at stake.

If you really want an iPhone, you have to go to AT&T. Otherwise, you've got another 3 years of waiting.
by mgheff June 2, 2009 8:22 AM PDT
@montex- you seem to know so much about this supposed 5 year contract. You are the only person to talk about a contract going that long. In other words 1. you are full of crap or 2. you work very very close with the CEOs of Apple and AT&T. I'm pretty sure it's the first one.
by stickyd June 2, 2009 10:38 AM PDT
The Blackerry Curve outsold the iPhone b/c of the buy one, get one free promotion RIM and Verizon have been running (and are still running). If Apple and AT&T did this, I guarantee you, the iPhone would be the Superior handset. RIM is scrambling to get their handsets in consumers hands, so they'll pull out all kind of stunts to survive....hence this last-ditch buy one, get one free deal. Apple doesn't have to do this to succeed or be wanted.
by Staszek June 2, 2009 12:08 PM PDT
@montex66

You are so incorrect its not funny. Everyone speculated that AT&T had a 5 year exclusivity but that was incorrect. If it was correct it would be 2012 btw not 2011 since the iPhone came out in 07.

That being said it was just reported last year that AT&T extended its contract one more year. Verizon will not get the iPhone untill end of 2010 maybe 2011 not because of exclusivity but because of their network. Once Verizon moves to LTE you will see a Verizon iPhone. It really doesnt make sense for Apple to create a CDMA phone for such a small market.

Yes in the US Verizon is a large market, but world wide CDMA doesnt even carry 10% of the worlds cell traffic.
by drew_sig June 1, 2009 6:53 PM PDT
is it really necessary to add a magnetometer?
Reply to this comment
by happyslappy13 June 1, 2009 7:57 PM PDT
honestly i dont even know what the hell a magnometer is. lol
by stickyd June 2, 2009 10:34 AM PDT
the manetometer is a key feature for the new iPhone. Google teh magnetometer to see all of cool things that can be done with it. There are endless app possibilities that will make it's a valuable asset!
by cineist June 1, 2009 8:47 PM PDT
I want unlocked iphone
Reply to this comment
by pickles319 June 1, 2009 11:28 PM PDT
Don't we all.......but not really.
by mgheff June 2, 2009 8:22 AM PDT
Yes but they would charge a TON of money for it.
by jskrenes June 1, 2009 10:03 PM PDT
I think Verizon should get something that totally blows the iphone out of the water: 12MP camera, HD video, all the standard mobile data stuff like email, internet, facebook, etc., not just wimp out with some marginally/debatably better hardware and buggy software.

As a VZW sales rep, the one thing that the iPhone brings to the table is a horde of rabid, blind spenders that will do whatever Apple says. I wouldn't mind having people camp out in front of my store, spend hundreds of dollars for already outdated hardware, and six months later do it again.
Reply to this comment
by popcornpool June 1, 2009 11:25 PM PDT
1. Want a 12MP camera?
Buy a dSLR, or a point-and-shooter in your case, 'cause I really doubt any cell phone you get can really give your 12MP camera pics the quality they should have... then again, your probably not looking for quality, just a bunch of 1600+ ISO blown-up photos that you're gonna upload to Facebook to feel good about yourself.

2. Want HD Video?
Get a laptop, netbook, or any device with a screen that's really worth watching HD video in. Seriously, an iPhone's screen is great to watch video and all kinds of stuff, but is HD really necessary? Let me think about that for a second... NO! Think! We're talking about mobile devices. HD is HEAVY, and there are close to none chances that you'll really get that much better quality.

3. About the "all the standard mobile data stuff like email, internet, facebook, etc."...
Wait... doesn't the iPhone have that already? Oh yeah, now I remember! It does! How on Earth did that slip my mind? Oh... oh wait.... it didn't! I just pay attention to what's going on around me! And guess what, I don't even have an iPhone!

Please. Pleeeeease pay more attention to what you're writing about. Especially the part about the 12MP camera, 'cause seriously, I'm amazed how all you Sony Ericsson users think you're the bomb! Look around! There are almost NO MOBILE PHONES with 12MP cameras!
by mgheff June 2, 2009 8:25 AM PDT
Well the Storm was supposed to blow it out of the water, but it completely failed.

I understand that the iPhone might be outdated in some ways, but in other ways it really isn't. I mean, first off is the touch screen. That is the whole point of the phone. I have yet to find a smoother touch screen. Internet: 3G and WiFi. sounds good. I mean it is't completely horrible. I would buy it.
by opinioncircle June 2, 2009 12:29 PM PDT
@popcornpool
Funny how when Apple comes up with a slighter better product than the competition, then everybody is like "Woa, that just made History period". However, when it's one of Apple's competitors, then it's just "get a laptop, get dSLR". C'mon man, stop drinking the Kool Aid. Apple, if the rumor is true, has made a pretty bad choice with that $99.
by geekintheoc June 2, 2009 5:14 PM PDT
Let's face it...As a VZW sales rep, you had to drink the kool-aid. You wouldn't be very good at your job if you went on and on about how another carrier had better this, or better that. So what, the iPhone may not be the best phone out there, but it has paved the road for a lot of new phones and features. Is it overpriced? I don't necessarily think so, considering the average cost of cell phones on the market in general ($350 for a TouchPro on verizon). Could it use a faster processor? Absolutely....but virtually every phone could (especially my blackberry 8330!). I'm sure that we will see it on VZW at some point. But before we do, don't worry. Verizon will figure out how to cripple it so that its a nice looking phone that makes a great paperweight. However, maybe they'll be kind enough to let VZW customers use the GPS on it without VZNavigator, or won't custom order it with a slower CPU or less RAM. Or let us tether it to a PC without charging an arm and a leg. In my opinion, the only thing that verizon has going for them in my area is the excellent network coverage. It certainly isn't their choice of cool, fully functional smartphones (look at the brick-like Touch Pro and compare it to the one from Sprint, for example). If it weren't for their coverage, I would have jumped ship a long time ago.
by BizzKill June 1, 2009 10:35 PM PDT
Apple may never offer phones on Verizon/Sprint due to different wireless technology (GSM vs. CDMA). In fact, the reason Apple chose GSM is that it can offer the exact same phone in 80+ countries/1B people. GSM is a far more efficient method to delivery wireless data (cheaper towers, sufficient data transfer ~ korean gsm towers transfer data at 20+mbs), therefore Apple would have to reengineer its device primarily for the US. Plus, if Apple decided to open its offering to multiple carriers, the carrier reimbursement (typically $300+ dollars per phone) would significantly decline, driving down Apple's legendary profit margin. For all of these reasons, Apple will not offer the iphone to CDMA carriers (Verizon/Sprint) for quite some time. More importantly, has any other cell phone equipment manufacturer ever been more successful over 2 generations supplying exactly 1 phone? The RAZR came close, but Moto had little foresight into the cell/smart phone transition.
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by DarkHawke June 1, 2009 11:40 PM PDT
This seems the most viable of any "low-cost" iPhone rumor I've heard. Though it wouldn't surprise me in the least to see Apple deem an iPhone "Pro" with so few feature differences between it and the current generation, given the faster processor and additional RAM, might this be the first iPhone that actually does multi-task? I know they pooh-poohed it at the beta 3.0 software intro, but then again, would they have referred to the current iPhone or the next-gen model when talking about the battery life penalty? IMHO, if the current iPhone will be cut down to a $99 price point, they will need a strong point of differentiation to sell the new generation at $199 and $299, and that can't just be the specs supplied above.
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by play7 June 2, 2009 3:37 AM PDT
"THE 80+ Carryers" in different countries leads many to believe that Iphones with be open for possible to diff users on different carriers.........Hence the "$99" iphone "WILL" be offered any backbone.
Reply to this comment
by pittsburghkatz June 2, 2009 6:00 AM PDT
I don't know if i'm in the minority (which i really doubt i am) but the problem with the iphone isn't the $200 sticker but the $70 dollar minimum (and really its more like 80 after taxes and fees) a month plan. And on top of that if you want unlimited texting, it comes out to be 90 dollars so after taxes and fees, your coming up to a hundred dollar phone bill a month. Thats just completely ridiculous.

On to point number two, on ATT's website you can buy a refurbished 8gb iphone for 100 dollars right now anyway (and a refurbished 16 gb one for 150). If the sticking point was really the two hundred dollar phone, wouldn't people be flocking to the website and buying these phones? I will say this tho. If you could buy a phone from the apple store without having to sign a contract like before, i guarantee they would have very impressive sales even by their own standard because a ton of t-mobile users (myself included) would go ahead and buy one and use it for t-mobile. Also they would make a ton of sales to people looking to buy an ipod, because it can be used an identical substitute for the ipod touch for 100 dollars as opposed to 230 they want for the touch.
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by opinioncircle June 2, 2009 12:32 PM PDT
Agree. The monthly price tag doesn't make sense in these times. AT&T should do something about it. The iPhone has had HUGE success, they could lower the price tag, and get many more customers...It's not like the new iPhones are going to fail...
by gba2000 June 2, 2009 8:06 PM PDT
I think they should lower the price, but why should they? Millions of people are willing to pay more so why lower the price?
by steel36 June 2, 2009 6:45 AM PDT
People don't opt for the iPhone because it's still missing one important feature that the new one still doesn't address: a better carrier. it's good to see Molly Wood and cnet doing a better job of calling apple and att out on the horrible coverage the majority of folks get. I know some of you do fine, but most do not. switch the <$30 phone radio out for a CDMA one and begin to grow again apple. oh, and adjust that plan cost; it's crazytalk.
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by greenfrogs June 2, 2009 7:00 AM PDT
I would buy a $99 iPHONE, but AT&T is still the issue. I'm a Verizon user and will stick with them because the coverage is so good. I'm waiting Apple, when will you come to the Red side?
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by SonyFanBoy June 2, 2009 7:43 AM PDT
Actually the low end iPhone at 99$ will be 4GB and not 8 GB.
I can confirm that because I work in a wireless company.
Reply to this comment
by mgheff June 2, 2009 8:28 AM PDT
Which company is that?
by play7 June 2, 2009 8:50 AM PDT
LOL yea right ..........:/ Ok I was crazy to yet reply to this message.....
by stunna3098 June 2, 2009 8:46 AM PDT
I don't see myself buying the $99.00 iPhone. It seems like a "watered down" version.
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