Analyst: no, really, a cheap iPhone is coming this summer
Posted by Dennis Sellers 
Feb 10, 2009 at 11:27am
Last month Apple’s Chief Operating Officer Tim Cook said, in an interview with the press and financial analysts that Apple has no interest in playing in the low end, bargain basement phone business, adding that “our goal is to build the best cell phones in the world.” But RBC analyst Mark Abramsky thinks he was just yankin’ our chains.
In a note to clients, the analyst predicts that we’ll see an US$99 iPhone this summer. According to Silicon Valley Insider, Abramsky said:
° The main cost reductions would come from fewer features. Abramsky thinks it might have a lower-resolution camera, no 3G Internet access or GPS, and a cheaper data plan (~$15/month) with a usage cap.
° Meanwhile, the iPhone 3G will get feature upgrades, such as a better camera, video capabilities.
° Abramsky thinks Apple could sell 20-30 million of these cheaper iPhones in fiscal 2010, boosting Apple’s smartphone market share to almost 20 percent.
° However, a cheaper iPhone will eat into iPhone 3G and iPod sales. And a lower subsidy and lower margins means Apple will have to sell three times as many to make the same gross profit from one iPhone 3G. Abramsky expects fiscal 2010 iPhone gross margins to shrink to 35 to 37 percent from 50-plus percent.
Be sure to check out the Macsimum Valetine’s Day Coupon book below. It has discounts available only to Macsimum readers.
Leave a comment ⇒
Please post the article topic & comment in our forums. No registration required.
Article Information
Comment on this Article Print this Article Email this Article Digg This
Contributor
Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 10,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
Recent Articles
