Tuesday, April 29, 2008

$199 Apple iPhone, Fact Or Fiction?

There have been many rumors floating around the rumor mill following the Fortune.com blog post "AT&T to cut the price of Apple’s new iPhone", but is there any truth behind them?

Several well known sites like Dailytech, TG Daily and MacWorld have jumped on the story and ran with it. However in my opinion a few things just didn't add up.

Fortune reports that AT&T is preparing to offer a $200 subsidy for customers who sign two-year contracts when buying the next-generation iPhone. It writes that since the new, presumably faster models will start at the same $399 base price as the current iPhones, that will drop the effective price to $199.

But wait a minute, what about people who buy in Apple stores? Its hard to imagine that Apple would want to sell iPhones for even a dime more in its stores than in another store. And we all know how Apple keeps exceedingly tight controls over its pricing. So Fortune is leading us to believe that AT&T is going to be undercutting Apple, a move I personally don't see happening.

This is an opinion shared by at least two other people. Saul Hansell over at the NY Times wrote today "The $199 iPhone? Something’s Missing from the Picture", and PC World's Editor in Chief Harry McCracken posted "The $199 iPhone: Cool! Possibly Imaginary!". Both share the same questions in regards to the Fortune blog post.

Rumors about the second generation 3G iPhone aren't new. Engadget recently reported that the new phone will have full GPS capabilities, a headphone jack that is no longer recessed, chrome volume buttons, and a shiny black rear housing all in a footprint slightly thicker than the existing iPhone.

The source of the Fortune blog posts is cited as confirming a few of these details. Stating the new iPhone will be 2.5 mm thinner than the 11.7 mm original and will also have a GPS chip for navigation and other location-based services.

As we all should know by now when it comes to Steve Jobs and the Apple crew rumors are just rumors and can be taken lightly until they actually make a release. So until the time comes that I show up at an AT&T store and see a $199 second gen iPhone I won't be getting my hopes up.

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