updated 11:45 am EST, Tue February 10, 2009
$99 iPhone still coming?
A cheaper iPhone will debut sometime this summer, according to RBC analyst Mark Abramsky. Citing checks, Abramsky says the device will not be a rumored iPhone nano, but instead a pared-down regular iPhone. The model could omit 3G and GPS functions, reduce camera resolution, and impose a cap on data usage; the tradeoff, however, would be a $99 entry price, attached to a lower-cost data plan, worth approximately $15 per month.
The flagship iPhone 3G is expected to get a number of potential upgrades, such as a maximum 32GB of memory, a combination video and still camera with more resolution, and a display supporting a higher 720x480 resolution. Both the high- and low-end devices would theoretically ship in June or July, the same timeframe as Apple's past two iPhone launches.
The $99 model may also require a lower subsidy from cellular carriers, valued at $200 instead of the $400 pegged to support the iPhone 3G. Abramsky suggests that as many as 20 to 30 million low-end phones could be shipped in FY10, boosting Apple's smartphone marketshare to nearly 20 percent. The analyst worries however that Apple may need to sell three cheap iPhones to equal the gross profit of a single iPhone 3G, and that gross margins in 2010 could slip from over 50 percent to around 35 to 37 percent.