Apple May Lower Price Of iPhone 4G To Boost Adoption Rates

Apple May Lower Price Of iPhone 4G To Boost Adoption Rates


Apple may induce greater iPhone adoption rate among smartphone buyers by launching a new device that will have a lower cost of ownership - This was one of the key points made by Morgan Stanley analyst Katy Huberty in a recent note to investors.

According to Huberty, one of the greatest barriers in increasing the iPhone adoption rate among consumers is the cost of hardware followed by the service plan cost.


Huberty believes that by lowering these costs, Apple will be able to establish a wider customer base in both the developed and developing markets. In her note, Huberty writes:

"We expect Apple to launch new iPhones in June that offer both a lower total cost of ownership and new functionality, potentially including gesture-based technology."


Huberty also believes that Apple's aggressive pricing strategy for the iPad could help them sell close to 6 million iPads in 2010, which is nearly double the number estimated by Wall Street Journal analysts. She writes:

"We expect Apple to ship its first iPad and announce additional content deals in late March to better than expected demand. We see the iPad targeting the sub-$800 consumer notebook market which equates to 30M annual units just in the US (120M globally)"
Last year, when Apple introduced iPhone 3GS, they had reduced the price of previous year's iPhone 3G to $99.

With competition from the other smartphone manufacturers heating up, the cost of iPhone is likely to be one of the key focus areas for Apple. However, we think that instead of lowering the price of next generation iPhone, Apple will reduce the price of current 16GB iPhone 3GS model to $99 just like last year, when they introduce iPhone 4G in June.

What do you think? Let us know your views in the comments.

[via Apple Insider]