A $99 iPhone 3G?

This entry was posted on Monday, October 27th, 2008 by SRASC
Category: 3G iPhone, Rumors.

Image representing iPhone as depicted in Crunc...

Image via CrunchBase

According to an article on AppleInsider.com Apple’s profits could give the company enough room to make a price cut to make strides in market share.

Analyst Charlie Wolf says that Apple’s doubled revenue gives them “considerable flexibility” to institute price cuts on iPhones if economic concerns or a simple desire to expand sales emerged.

About two million of 6.9 million iPhones are counted as worldwide inventory and hint at a possible decline in iPhone sales in the fall. Wolf explains that iPhone sales are likely to keep increasing thereby making a price cut more feasible.

he continues by saying that Apple’s own breathing room is important as well. If Apple TV sales aren’t included, Needham Research estimates an average selling price of just about $666 for each iPhone, which is about 50% gross over the actual cost of producing & selling one. This would leave Apple with significant room to cut prices without affecting AT&T subsidies & could result in a $99 iPhone 3G while still carrying a 42.3% margin.

They estimate should Apple do this they could potentially “double or triple” projected sales for iPhone, which could be 15.7 million of them in 2009.

“In short, the iPhone… could figuratively take over the smartphone market leaving only niche players like BlackBerry”, Wolf argues.