iPhone 3G for $99?

 

iPhone 3G from Apple

Rumors have been circulating since summer about Apple’s potential release of the $99 iPhone.  Mike Abramsky, analyst of  RBC Capital Markets said Apple will launch the entry-level device alongside an iPhone 3G performance upgrade in June or July.  However, if we can recall correctly when Apple launched both the 4Gig and 8 Gig versions, at $499 and $599 respectively… and two months later in September the 8 Gig model had been cut significantly to $399. The main difference here with the $99 iPhone is that it will cut a couple  features all to familiar with any iPhone user/guru in order to keep the price down. It’s not verified by Apple yet, however the new model is unlikely to have 3G and be GPS capable as of now. 

And now, Apple is thinking about expanding their distributors in order to boost sales. This would mean opening up networks such as T-Mobile, Verizon Wireless, and Sprint. The opposition phase has clearly commenced for a $99 iPhone around the world. From a marketing standpoint there are a few benefits.

 

• iPhone is more affordable for gifts any time of the year, for basically any age group. 
• Sales may increase with the first-time buyers and late adaptors
• A “test-me-out” version of the original iPhone

 

However the negatives are shining in my face, and they must be mentioned

 

• Branding Image- why come out with extremely overpriced goods and drop them so sharply? It’s clear Apple has taken advantadge of the skimming AND penetration techniques much too quickly (hence the consumer complaints)
• Confusion. The iPhone at first was idenitified as an innovative, expensive device. Objects with these traits are positioned in the consumer’s mind as highly desirable, but not quite affordable for the masses. Take a Mercedes C Class for insatnce. What if you bought one two months ago at 60K, and now they have lowered them to 40K, the company made an ‘aplogogy’, offered you a free oil change and are planning to come out with the Mercedes C class for the less fortunate (minus a few product benefits)?  What happens to the Mercedes branding image..?

 

Overall, like all companies APPL needs to survive. Especially with our global economy struggling at present. Maybe this move is slick, or maybe it’s not. We’ll see what this decision brings once the figures are out.