Knowing that iPhone 3.0 is going to be released in a few weeks, it’s no surprise to see Apple contemplating a price cut to get more people to get their hands on iPhone. But Global Investor is running a piece that suggests Apple is planning to cut prices with the new iPhones as well. We have known for a while that there will be multiple tiers, and it seems the low-end model will cost only $99. Having a low-end model will allow Apple to expand its business and sell more units. More people will get to enjoy what the iPhone has to offer. But is a $100 discount encourage recession-wary individuals to spend a fortune on a 2 year at&t contract?
So how does Apple do it? Apple can take advantage of low part and labor costs to drop its prices. And you can be sure that Apple’s marketing machine will let us all know about the huge discount that we will be getting (50% to be exact). But one has to wonder whether at&t is ready to drop its prices further or develop a cheaper plan just for low-end iPhones.
I am still not sold on the idea of budget iPhones. Just as I am not sold on the idea of subsidized netbooks. Every-time you give people a big discount but ask them to part ways with a couple of thousands of dollars for a wireless contract, you are not really doing much. There is no question that a lot of people will take advantage of the cheaper iPhone, but the plan will work even better if at&t cooperates as well. We know at&t is also planning to lower its prices on its iPhone plans. Let’s hope it’ll be a significant discount.