Businessweek: AT&T lowering iPhone costs

Mon, 05/18/2009 - 8:54am — Seth Weintraub

Echoing an earlier rumor, Businessweek is now saying that AT&T is ready to reduce prices on iPhones. They see the long-rumored $99 price point for iPhones and lower tiered wireless plans. The cost will be made up for by the iPhone's cheaper hardware, resulting in a lower subsidy by Apple.

New devices may cost as much as one-third less to produce than earlier versions, Doherty says. The cost of touchscreens, the most expensive component, has declined by more than 30% in the past year, estimates Michael Cote, an analyst at consultant Cote Collaborative Wireless Strategy.

They have a source with knowledge of the situation:

The exclusive U.S. iPhone service provider is considering cutting the price of its monthly service package or offering a range of lower-priced plans, say people with knowledge of the company's thinking. One plan that could be introduced as early as late May would include limited data access at a $10 monthly reduction, the people say.

Late May would be a way to get rid of excess inventory of 3G iPhones as well. We're not sure "limited" data access would be something that Apple would want as part of the experience. Perhaps they mean they are disabling the 3G radio and only allowing EDGE? 2007 tech at 2007 prices!

Remember, we've also heard from the WSJ that AT&T is going to raise prices...

While we'd love to see some better AT&T plans, we have a few issues with this. First of all, we've been hearing things like better camera and digital compass (along with other stuff we haven't heard) are coming to the iPhone, which would negate some of the cost savings on hardware. Also, as the Wall St. Journal said, AT&T doesn't have much room for pricing changes. iPhone use data more like a computer than like a phone.

In related news, AT&T today claimed it had twice as many smartphones on its network than any other carrier.

( Filed Under:

iPhone - iPod

)

Comments

well limited data access is

Mon, 05/18/2009 - 9:14am — Hansköbi

well limited data access is nothing apple cares about outside the us....why should they care in the us?

To me a lower cost with

Mon, 05/18/2009 - 9:38am — 9to5Mac Noob (not verified)

To me a lower cost with limited data access does not help me. I would like an iPhone for its data access but really I would not use the phone part all that much.

To me a pay as you go phone plan with a data access plan would be more of a selling point. I guess the question is, how limited is "limited access"?

Apple should have three

Mon, 05/18/2009 - 10:17am — Tonny (not verified)

Apple should have three iPhone models out there:
1. An 8GB for $99 that is basically the same phone available now
2. A 16GB for $199 with 3.2 megapixel camera, video, compass
3. A 32GB for $299 with everything the 16GB has

Pay-as-you-go possibilities

Mon, 05/18/2009 - 10:26am — 9to5Mac Noob (not verified)

The cost of touchscreens, the most expensive component, has declined by more than 30% in the past year

The electronic component cost is only a small portion of the expense of an iPhone. All the engineers and support staff costs way more than several million touch screens.

Perhaps the lower pricing of the components will allow Apple to drop the price of the iPhone by $20 to $30, but $100? That's very unlikely.

As for a "lower priced" plan, does that mean email-only data access? That seems to be a huge limitation. Apps you buy at the app store need data access; so do Maps.

Edge-only plans seems like a non-starter option, because the technology is slowly being REMOVED from service and REPLACED by the more cost-effective, more efficient, and overall cheaper to operate 3G service.

The only option I see as a viable one is a pay-as-you-go data plan, where you pay per "AT&T" megabyte, kind of like the AT&T international data plan. Perhaps the standard voice plans will suffice, with an option of $1 per 1 MB of data transfer. For email-only and light-weight users, this would be a big savings. But for those who use data a lot, the current monthly plan would be a better choice.

or...

Mon, 05/18/2009 - 11:12am — GQB (not verified)

... for people who use wifi 95% of the time and only need phone-data for the occasional quick lookup of something when away from a hotspot.
I'd take pay-as-you-go in a heartbeat as long as I had protections that prevented me from using it inadvertently.