Charlie Wolf, a financial analyst for Needham Research, has noted that due to the pricing structure for the iPhone and the heavy subsidy it receives from AT&T, Apple has a great deal of flexibility in marking down its price for the iPhone while still retaining a healthy profit margin. Wolf believes that Apple could cut its price for the 8GB iPhone to $99, resulting in doubling or tripling of sales and an accompanying devastating effect on other manufacturers of smartphones such as BlackBerry, Motorola, and Palm. Big price cuts on RAZRs and certain BlackBerry models during the past summer‚Äîsome models well under $100–led to a significant boost in sales for both Motorola and Research in Motion (maker of the BlackBerry). Such a move by Apple, Wolf believes, would so increase its market share such that all but "niche" smartphones, like the BlackBerry, would be driven from the market.
Posted in: Fun Stuff– 11/05/2008