Apple will indeed introduce a cheaper iPhone next week, the FT says–one that sells for $99 or $149. This will chop $50 or $100 off the current $199 price tag.
Aside from getting iPhone holdouts in on the game for less, the cuts are expected to radically expand the iPhone’s market share:
Citing a firm survey of consumers, [Morgan Stanley analyst Kathryn Hubertysaid that a $50 price cut could increase demand by 50 per cent and a $100 cut by 100 per cent.
Apple sells about 11 per cent of the world’s smart phones, trailing Nokia’s 41 per cent volume and Research in Motion’s 20 per cent, according to Gartner figures from the first quarter. Palm’s Pre was expected to go on sale later on Friday.
AT&T also continues to make noises about introducing variable pricing for Internet service, in which heavy users pay more. Consumers hate variable pricing, but if the change actually leads to a price cut for most of them, they probably won’t complain. That change is expected next month which is when the new iPhone is supposed to go on sale.
See Also: $99 iPhone On The Way?