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Cheap iPhone 3GS may put Apple in 'sweet spot' for sales

updated 11:00 am EST, Tue November 22, 2011

RIM seen as most under threat

The iPhone 3GS, now either free or $1 on contract, may put Apple in an ideal spot to compete against other smartphone makers, claims a new Credit Suisse report. The firm says that in October Apple began selling the 3GS to carriers at an average price of $325, making it possible for an iPhone to be totally subsidized on the consumer's end. A $250-400 carrier pricetag is said to put Apple in the same range as where most of its competitors operate.

The $250-400 market is forecast to grow 80 percent over the next four years, from 119 million phones to 213 million. Credit Suisse suggests that Apple could take 25 percent of that market, putting pressure on competitors who already have tight margins. HTC and Samsung are said to be the "most exposed," as they have 22 and 20 percent shares of the $250-400 spectrum.

The company which might suffer most though is RIM, as result of "ongoing concerns around its product portfolio." The company has had little luck with touchscreen devices, whether in terms of BlackBerry phones or its PlayBook tablet. On Monday Credit Suisse dropped its target for RIM stock from $30 down to $20.

A potential counterweight to Credit Suisse's perspective is the age of the 3GS. The phone is now over two years old, and lacks the memory and processing power of some of its rivals. iPhone buyers moreover tend to gravitate towards the latest hardware, and Apple may well discontinue support for the 3GS in 2012, much as it has cut off the original iPhone and the iPhone 3G.

By Electronista Staff
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  1. BigMac2

    Forum Regular

    Joined: Dec 2000


    May put?

    Free is always the sweeter spot...

  1. testudo

    Forum Regular

    Joined: Aug 2001


    what's next?

    BOGO iPhone deals? Oh, wait, you can do that now, since they're giving them away.

  1. SockRolid

    Forum Regular

    Joined: Jan 2010


    iPhone for all market segments

    "iPhone buyers moreover tend to gravitate towards the latest hardware..."

    That was before iPhones were available for $1. The ultra-cheap 3GS will bring a new class of customers into the Apple ecosystem. Those who would never have bought any iPhone for $100 or $200.

    And the ecosystem is where it's at for Apple. iTunes paved the way for Apple's success in the 2000s. iCloud will pave the way in the 2010s. And now iPhone is available to low-end, mid-range, and high-end customers. Apple has the entire consumer smartphone market covered, and they're locking up the corporate market as well.

  1. wrenchy

    Forum Regular

    Joined: Nov 2009


    re: market segments

    >>>The ultra-cheap 3GS will bring a new class of customers into the Apple ecosystem.

    Yeah the "Cheapskates" & "Freetards".
    Where's your arrogance now?

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