Analysis conducted by reporting firm, iSuppli suggests that Apple has a huge profit margin in iPhone and price cut might be inevitable once the product goes retail. According to them, the overall production cost of 4GB iPhone which sells for $499 is about $245.83. Meanwhile, the production cost of 8GB iPhone which sells for $599 is just $280.83. This figure doesn’t include research and development or advertising costs.
So will Apple cut prices on iPhone? Well, I believe that it all depends on how the consumers react, once it starts retailing. Moreover, Apple might be worried that a price cut on iPhone would considerably eat away iPod’s market share (especially, Nano’s). If consumers think that iPhone isn’t affordable or it isn’t worth the price, Apple would be forced to cut prices.
Usually, I don’t like to speculate, but I think that Apple would try to cover their R&D costs before dipping the prices (Ofcourse, brand factor and component prices do play their own roles).
News Source: CNet News
Discussion
Comments for “Will Apple Cut Prices on iPhone?”