Comments on: Yes, Apple should sell a $99 iPhone

It's just a rumor at this point, but a $99 iPhone could help Apple dominate the market for consumer smartphones before the competition has a chance to catch up.

[myles taylor]

I think this would be a good idea. The main reason for not seeing it dominate like the iPhone, IMO, would be the contract and being forced to couple with AT&T. That's what's keeping me from getting an iPhone so far, although I probably will eventually. With an iPod, you got it and then you went from there. With an iPhone, you're stuck for at least 2 years.

[sakoba]

Instead of coming with $99 Iphone, Apple should really look at selling unlocked phones.... there is even bigger market for that and people will pay premium. The deal with AT&T was a mistake.

[egghead1619]

@sakoba
One major thing to consider with Apple, is that they want the user to have a simplified experience with their products and a very low error rate. By selling 'unlocked' phones the user has the potential to run into many problems with the hardware. This is the main reason why Apple has restrained itself from releasing Mac OS as hardware independent. By knowing exactly what the user will encounter, Apple can tailor it's software and hardware to provide the most smooth experience possible.

I would really like an 'unlocked' iPhone, but I'm not sure if I want to sacrifice the quality of the experience for it.

[gjfeng_test]

I would like an 'unlocked' iPhone too.

[jojothedancer]

Once Wal-mart customers realize the porn capabilities of this phone, they'll sell tons of them. No more having to lock the door to the 'computer room', just head to the bathroom, or garage, or back porch.

Mark my words, I know Wal-mart, I know phones, and I know porn.

Once again the pink elephant is back in the room, ready to drive technology sales.

[Zaunto]

Did you say "Porn capabilities of the iPhone"?? I'm already an AT&T customer and my 2 year upgrade is due next year. I would sure as heck get an iPhone if they make a $99 iPhone with a decent camera and a replaceable battery.

[phineasfogg]

While a $99 iPhone might do just as you suggest, what is the configuration of that iPhone so as not to really tic off current $199 iPhone 3G users? Maybe do without the GPS? definitely must keep the accelerometers for the game market. Or does the AT&T rate go up to $35 from $30 for a 2-year contract grossing $120 of which AT&T pays $100 commission back to apple? or maybe memory goes down to 4G? my wife has a 4g original iPhone with 140 songs, 40 apps and a bunch of podcasts and still have nearly 1g memory left. Not a bad idea actually. THen with the new up/down load apps one could off load what is not wanted for newer stuff then swap apps later.

I like it. Apple always finds a way to make a profit. I now agree a $99 iPhone 3G with only 4g memory and a $35/month AT&T fee could do it.

[ddiddy415]

FFFFFFFFFFFFFFFFF wal-mart. I do not support a store who underpays there employees and is the global leader in not providing healthcare. Anybody who shops there supports what wal-mart is doing

[myles taylor]

What does this have to do with anything? If Apple starts selling a $99 iPhone, it's not going to be just at Walmart. This is about the iPhone.

[zeroflex2000]

I would definately buy one from Wal-Mart for $99. I am on the edge of buying and iPhone and the $99 price tag would put my decision over the edge.

Plus I got to support Wal-Mart and people being responsible for their own well being.

[milky703]

This post was not very clear about the fact that the iPhone priced at $99 would have only 4GBs of flash memory.

[ikramerica--2008]

Expect the iPhone to go to 32GB, which would mean that the $99 Walmart phone would be based on the current generation 8GB, and then the $199 8GB would be replaced with a 16GB with a faster processor, and the $299 16GB would be replaced with a 32GB with faster processor at that price point.

And when that happens, I'll finally get jump on the bandwagon and get a 32.

[Penguinisto]

Neat idea, probably won't happen.

The reason why is simple... AT&T still has an exclusivity contract for selling and carrying iPhones, so unless WalMart and AT&T and Apple want to get in bed together... well, why can't Apple and AT&T just do it among the Apple and AT&T stores w/o having to give Wal-Mart a vig?

I also suspect that the $99 deal may not mean a smaller phone (or an older one), but a longer contract (with the lower price being the bait).

That said, it is still possible - just not probable.

[Vegaman_Dan]

UPDATE: Walmart has confirmed that they will indeed be selling iPhones this winter, but no set prices are announced.

Walmart sells other AT&T branded phones, so there isn't any issue there.

So it's not only possible, it's happening.

[mahurshi]

It'd be nice if they bring down the $30/mo charge for the dataplan also but they're probably not going to do that.

[myles taylor]

Since when does Apple control that? It's like blaming LG when you don't like Verizon's data plans.

[ferretboy88]

They will give you a $99 Iphone but then up the net charges to $40 a month to make you look like you are getting a deal. They could charge $100 a month for text messages and no one would even care. 49% of iphone users make over $100,000 a year.

[AppleSuxLeo]

Iwouldn`t use anything Apple no matter what. They write bug-filled lousy software , esp. for the PC. And you have to give them credit card info. and use iTunes or it won`t work.
All the PDA and music , photo , and video functionality of my 3 YEAR OLD MOTO Q works just fine even if there is no phone service activated.

[Perry_Clease]

Grow up Leo.

[ballmerisanape]

"I wouldn`t use anything xxxx no matter what. "

Admitting you have a problem is the first step to recovery. It seems you have an irrational "hatred" for Apple... or are a MS fanboy to the extreme. Either way.. you are on the road to recovery. There is still hope that one day you will return to being a rational, objective consumer.

[lightningrob]

If you think Apple makes lousy software compared to WinMo, I beg to differ. I had the Moto Q a few years back, and it crashed frequently. Every time I tried to shoot a video it would freeze. The camera resolution, keyboard and battery life all stunk, and the screen constantly looked smudged. Some of this is hardware and not software; my current Samsung i760 runs WinMo and is significantly improved. But watching people on the street happily using their iPhones, they all seem to be having a superior user experience to what I've got.

[Pishkado]

The $199 price of an iPhone is already negligible compared to two years' worth of service. They could give it away and it wouldn't matter. The money isn't in selling the device.

[egghead1619]

Problem is that you can cancel your service right after you sign up and only have to pay like $200. This is typically where the subsidy comes from. AT&T is saying that you can purchase the iPhone for $200 less than the market value in exchange for you fulfilling your service contract. If you choose to terminate the contract, then you are paying full price for the iPhone. This is usually the way subscriber agreements work.

[chevault]

Part of the "Apple Appeal" is that they tend to be generally a consumer-friendly, socially conscious company - two things that Wal-Mart are definitely NOT (witness their actions - or inaction - that led to one of their employees to be killed on Black Friday and their pathetic not-our-problem response after). Wal-Mart is widely (and rightly) reviled as being one of the worst corporations in America in terms of social consciousness and consumer concern and Apple jumping into partnership with them would result in a blow to their appeal of their brand. If they were to create a pared-down iPhone and were to offer it through a different retailer (Target, or their current Best Buy partnership), I would be in support of the move, however, they will find themselves losing their good will by offering the same phone many of us purchased just a couple months ago at that deep a discount. I, for one, hope this rumor stays just that ... rumor.

[NickL917]

They are hated by socialist because they are doing well and don't need tax payers to bail them out.

enough said

[zeroflex2000]

All tech devices price drops after they have been out a while. Why should Apple be held to a different standard and keep their prices the same as not to offend current owners of the iPhone? Should I be upset with Sony because the price of the Blu-Ray player I bought sells for $100 less now? If you were that concerned about paying $199 for the phone, maybe you should have waited for the price drop to occur.

[chevault]

And they are loved by fascists because they place their profits above all else - including people. Though you, NickL917, may be one of those willing to trample another human being to death in order to get your discounted DVD player, there are, thankfully, "socialist" (sic) out there who are not and find the "cost-saving" measures that lead to the death reprehensible and just another tragic example of Wal-Mart's

As for electronic prices dropping, Apple has a history of updating their products, not slashing their prices, in order to maintain consumer interest. A history that has worked quite well for them. I understand that they may choose to lower the iPhone price eventually - but would not expect it within months of the original launch. That's sooner than "a while" for any market.

[zeroflex2000]

Well I was going to defend that 6 months does define "a while" statement and discuss the topic further but after reading your Wal-Mart fascist statement I realized that it would be a waste of economics and logic. Good luck on your future lawsuit against McDonald's for serving you 'hot' coffee.

[loose_screw]

Apple catering to the trailer trash crowd...wow. I thought the almighty Steve Mobs would die before he'd let the Mapple brand name get tarnished like that...

[wratbatblue]

That's pretty snotty. If you think only "the trailer trash crowd" shops at Walmart, you're sadly mistaken. But then, no one who would make an ignorant statement like that one would care about its accuracy.

[studiodave56]

Now back to the story, I see this as a good reason why Matt Rosoff is an analyst, not a businessman.
Clueless.
What are the first 4 letters in analyst?

[NickL917]

The $199 Iphone is like finding a 10 cent parking meter in Manhattan or the mythical giant flying green unicorn that talks. Strange that the cheapest I see an iphone for is $500 on craigslist and the seller wants moneygram which in my book carrys a huge risk of being scammed.

So the $99 Iphone will be as common as a parking meter that takes a nickel for 30 minutes of parking in Manhattan.

Why did Apple make the buying process so cumbersome. If you are lucky to find one for $199 or $239 or whatever you must activate with AT&T or else you can't buy it. So there is this new market where they are maked up between 200% - 1000% where despite this doom & gloom about recession, they are selling selling out usually for more than asking price at least on Craigslist or Ebay.

[lightningrob]

I don't see it, mainly because Apple is doing great at the $199 pricepoint, which seems to be the sweet spot for smartphones at the moment. Palm is selling the Centro for $99 and look how they're doing. Plus, many people are sticking with simpler phones due to size as opposed to price.

[mikeburek]

Yes, the iPhone for less upfront would be great. It would especially help for when you get that first bill with activation charges and other misc fees.

But for me, I'm looking at the long term monthly payments. I bought the Helio Ocean when it got to $200 because at the time, there were the only ones with unlimited internet / texting / IM. And it was $65 / month. That was with 500 daytime minutes. This was the first time I paid more than $80 for a phone, and even that was pushing it.

No, I'm not trying to convert people or be a Helio fanboy, but I'm just saying the monthly price is what made it feasible for me.

The G1 has nearly the same price, last I checked. I think there are fewer minutes, but I hardly use the phone part of my phones.

This $65/month is about as high as I want to go (well, before taxes and fees and raping my wallet).

An entry cost of $400 for just the phone would be too big of a deterrent to me. $200 is a good price for something that will provide lots of functionality for the next 2 years. $100 would be nicer, and free even better, but it still doesn't quite offset monthly fees that are too high for my liking.

[kevinskrause]

Soo, is the $99 phone really the $199 phone? I?m confused. Everyone seems to have forgotten the pricing structure. I have been an AT&T customer for 10 years. I never really had a need for a Smartphone until now. Last January, my Nokia of almost 6 years crapped out and I was forced to get a new phone. I signed another 2 year contract so I could get the free Nokia offered; I would hardly consider it an upgrade. Now AT&T tells me I have to wait until September of 2009 to receive the Qualified Customer iPhone price. It?s not that I?m hurting for money, and I?ll probably purchase the device by the end of this month, but I am astounded at their ridiculous pricing model and false advertising. What a crock!!

[mikeburek]

I'm upset about the way the use of the term "subsidizing" for all these phones. If the phone really was subsidized for a 2 year contract, then why can't I get a lower monthly rate after my phone has been fully "subsidized?" Or if I were to flat out buy an unlocked phone, why do I have to pay the same price as someone who got a free phone?

[zeroflex2000]

Good point. Makes sense to me.

[Evo2Wish4]

Rate Plan has nothing to do with the Subsidized price of the phone. You are buying the phone for less than what the phone Retails and thats why Phone companies have a 2 year contract attached to phone purchase. Att doesnt give you a 2 year contract if you dont by a phone from them at a discounted price.

[kai6novice]

maybe they will sell the iphone for $99 with 3 or 4 years of ATT contract. I think that would work out for both party. LOL