AT&T $199 iPhones

May

8th

Posted by ifreak

at&t logo Whoa! Reports from Fortune shows that AT&T is preparing a subsidy of $200 for consumers of the next-generation 3G iPhone, which is scheduled to make it’s debut this summer. The assumption is that, since the new and presumably faster models will start at the same $399 base price,that will drop the effective price to $199.

This is certainly good news for everyone as pretty soon, the market will be flooded with iPhones. Apple and AT&T are working hard to get the iPhone to a price that puts it within reach of most people. Research has shown that iPhone owners spend twice as much as the average customer because they buy data plans.

The report also stated that AT&T will offer subsidy to people who buy the iPhones in it’s flagstores, but not to those who buy in Apple stores. I’ve yet to confirm the degree of truth in this report since Apple keeps exceedingly tight control over its pricing.

My guess is that this report may be pointing the way to one of two (not mutually exclusive) developments:

AT&T wants to lower the price of the phone and raise the price of the data plans. Right now the unlimited data plan for the iPhone costs $20 a month, far less than the $45 a month the company charges for unlimited data on a BlackBerry. Now that the iPhone can also connect to corporate e-mail networks, AT&T may not be able to justify a gap in the monthly fees for its smartphones. To make up the difference, it could raise data rates and subsidize the phones. My guess, however, is that the $200 subsidy would be available to people who buy the phones from Apple stores as well.

Apple will start selling unlocked phones. Apple has found that an enormous number of its customers are unlocking the phones, using third-party software, to use on carriers of their choice. If Apple were to remain in keeping with its culture, it would simply try to make the next-generation iPhone even harder to unlock. But then again, it could decide to avoid this fight, change its business model and just sell phones. That would mean, presumably, giving up the monthly fee it gets from AT&T and other carriers. In this scenario, Apple might well raise the price of the iPhone to, say $599. But then it would have carriers offer subsidies in return for contracts, as most other handset makers do.

Here’s one prediction I will stand by: We will have more leaks that don’t entirely make sense and are not consistent with each other until Steve Jobs ascends some stage somewhere with some answers.

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