Meet the $99 iPhone. Unless it’s the $149 iPhone

June 5, 2009 | Paul Boutin | Comments |
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Apple plans to introduce a low-cost iPhone on Monday at the WWDC worldwide developer’s conference in San Francisco. The carefully-worded reporting at the Financial Times implies that they’ve got inside info. But with wireless carriers including AT&T desperate to keep their customers from being stolen in a down economy, AT&T could simply give iPhones away if they wanted. Industry gossip says AT&T is ready to lower its price on iPhones to catch and keep customers before the company’s exclusive deal with Apple expires in 2010.

Morgan Stanley analyst Kathryn Huberty told FT that a $50 price cut from the current $199 entry price could increase demand 50 percent, and a $99 price could double it.

The price of an iPhone handset to consumers is aribitrary, since the phones are heavily subsidized by AT&T. One handset maker’s CEO told me my $199 iPhone costs AT&T another $350. (Rival handset makers sure like to beat up on the iPhone.)

iPhone watchers say the only major difference in the credible spy shot above is that the phone’s headset jack has been moved from the top to the bottom of the device. Expect a new version of the phone’s operating system as well — the iPhone 3.0 OS will allow apps to turn new tricks.

My favorite improvement in iPhone 3.0: Apps will be able to run in the background. This will enable, for example, a GPS app to keep running and talking while you’re in motion and using the iPhone for something else. Apple’s previous operating systems banned background action to keep battery life from being a letdown.

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About the Author, Paul Boutin

Paul (paul@venturebeat.com) covers Apple & the iPhone, social networks & social media, digital music & video, and any crazy Internet story. Paul wrote and edited for Valleywag from 2006-2008, after several years with Wired magazine and Slate. He writes regularly for The New York Times' technology section and sometimes for Wired and The Wall Street Journal. He studied computer science at MIT in the early 1980s, and worked as a software developer and network administrator for 15 years before becoming a professional writer. Follow him on Twitter at @paulboutin, and follow VentureBeat on Twitter at @venturebeat.

  • I was really hoping to dump the iphone for the palm pre. It does A2DP and I like a physical keyboard. But the reviews seem to indicate that it is not the iphone killer I had hoped for, so now I just don't know.

    Rae
  • Facebook User
    I don't think we'll be dumping the iPhone. My relationship with Apple just got official. This is serious business. Apple & FB FTW. I am pretty positive that I figured out my identity now. I'm an Apple, and I'm not PC at all.
  • iPhoneOS3.0 Developer
    That's either a fake shot or Apple isn't shipping MMS with the new iPhone. The SMS icon doesn't look like that in iPhone OS 3.0.
  • chleoku
    It's will be an interesting week next week. Palm is introducing Palm Pre - head to head competitor with iphone 3.0 and Palm Pixie which is head-to-head competition with the '$99 iphone':

    http://www.wealthalchemist.com/Blog/2009/06/pal...

    Let's how the game going to be played out
  • guest
    Does this ever increasing price drop in order to boost market share and sales seem reminiscent of the RAZR's slide to you?
  • BobaFett
    It only does to you.
  • the thing about background apps is just wrong. there won't be background apps running and the example you cite would not work. the only 3 ways the app can function while not active is by sending a text alert (like SMS messages that pop up), make a noise alert, and post a badge on the icon on your homescreen. so. ya.
  • I knew that in the not to distant future Apple would release lower cost iphones as soon as they knew their first generation iphones would be a hit.
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