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Wed, Nov 04, 2009 - 09:19 PM EST  —  AAPL: 190.81 (+2.06, +1.09%)  |  NASDAQ: 2055.52 (-1.80, -0.09%)

Gartenberg: Apple breaks psychological price barrier with $99 iPhone 3G, now ‘an affordable luxury’
Tuesday, June 09, 2009 - 12:15 PM EST

"Apple's biggest unveiling at its annual conference for software developers was a new model of the iPhone, the 3G S. It looks the same but sports a faster processor, longer battery life, an internal compass, a video camera and a photo camera with better resolution and auto-focus," Jordan Robertson and Jessica Mintz report for The Associated Press. "A 16-gigabyte version of the 3G S will cost $199 and a 32-gigabyte version will be $299."

MacDailyNews Take: When and if Jessica has a baby, she should definitely name him "Junior." (We're sure she's heard that one a million times already, but we're feeling a bit giddy today.)

Robertson and Mintz continue, "The 8-gigabyte iPhone 3G, which came out last year, now costs $99, instead of $199."

"Industry analyst Michael Gartenberg, with the Interpret market-research firm, said the new iPhone pricing breaks through an important barrier for consumers. It will likely cause other smart phone makers to offer something similar, he said," Robertson and Mintz report.

MacDailyNews Take: At great detriment to them as most of them are one-trick ponies that, unlike Apple, do not have other viable businesses. RIM and Palm cannot afford to sell their iPhone wannabes at such prices; they simply cannot compete.

The fact is that Palm simply does not have the resources with which to effectively compete with Apple, much less create another mobile platform (especially one that is superfluous) or even effectively bring their Prevarication to market. - MacDailyNews Take, January 28, 2009

Robertson and Mintz continue, "'Every $100 you move down in consumer electronics brings in a lot more customers,' Gartenberg said. 'Ninety-nine dollars is a psychological price point, so that's a real barrier to move through. It becomes something people can afford — it becomes an affordable luxury.'"

Full article here.

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Jun 09, 09 - 11:17 am Comment from: fred

$99? Big Deal!

It's the monthly service charge from ATT that is the problem. I pay $70 per month and I'm canceling june 29th.

Some people pay over $100 per month, which is crazy. It's just a phone!

Jun 09, 09 - 11:21 am Comment from: jltnol

it's not the phone, it's the ATT plan that's the problem

Jun 09, 09 - 11:22 am Comment from: R

I find the phone and its plan worth it considering my usage. Except when forced to, I no longer need to carry a laptop around. I think the iPhone is phenomenal.

Jun 09, 09 - 11:23 am Comment from: rahrens

No, it's not.

It is the newest, most powerful hand-held computer on the market that is in contact with the Internet 24/7 anywhere there's a cell network.

Yeah, if it was "just a phone", that would be an exorbitant price, but it's not.

Jun 09, 09 - 11:23 am Comment from: Tired of Retards

fred and jltnol,

Go look up "psychological price barrier," you morons and give the rest of us a break from your idiocy.

Gartenberg is talking about the same effect that makes fools buy $699 Dell laptops: sticker-price fixation at the exclusion of all other factors.

Jun 09, 09 - 11:29 am Comment from: Predrag

I think fred and jltnol got it wrong. It's not the plan, it's the price of the phone.

When a person goes into a store to buy a new cellphone, they look at the PRICES. They never look at the plan. The moment they see that famous iPhone for less than $100, they'll HAVE to have it.

The realisation about the plan comes much later, after the contract has already been signed, and after they already totally fell in love with the device. It is possible that there will be a number of people who will then realise they got themselves into a pretty deep hole with $80+ per month (with all necessary surcharges, taxes, fees, etc) and will try to bail out of that contract. However, vast majority will stick it out, perhaps re-evaluating the value of the plan once the contract is up and once they can switch to a cheaper contract/phone (like our Fred person above).

$99 iPhone will sell massive amounts, even WITH the economic crisis.

Jun 09, 09 - 11:34 am Comment from: DreamTheEndless

@MDN -

I'm just curious - do you log the IP addresses of people like fred and jltnol and the other paid trolls to see which ones come up more often?

I know lots of people, with and without iPhones, who dislike ATT as a company or their service, policies, customer service, etc...

However, I do not know a single person who thinks the iPhone rates are unreasonable for a smartphone.

In fact, a friend of mine has a blackberry with unlimited voice, unlimited data, and unlimited text. If he switches to ATT/iPhone he will save $30 a month.

These people are clearly paid spreaders of FUD probably employed directly or indirectly by Palm or RIM.

Jun 09, 09 - 11:39 am Comment from: AC

I can afford the Phone, no problem there. I can not afford the AT&T;bill. People need to demand that this product association become illegal. At least Apple should let people buy the iPhone at full price to be used with other networks. It should not be a FULL exclusive deal.

No matter. I'd rather buy a iPhone off of eBay at 500-700$ just to stick it with the man. And I guess if I could afford that, then I could afford the bill. BUT. I already have a plan with T-Mobile so it is not worth it. SO. I'll just save and save until I can pay the 800$.

(also I like the $ sign after, get over it)

Jun 09, 09 - 11:43 am Comment from: mike_in_helsinki

What a bunch of whining ass babies. First they bitch about price, then features, then monthly fees ... never ends. Get these babies into some new diapers, asap.

The iPhone is better than a phone, and better than a computer. If you dont want to pony up for all of that, carry it over and get a Nokia phone from T-Mobile and save yourself 30 bucks a month.

Apple does not want your business.

Jun 09, 09 - 11:53 am Comment from: iSteve

While I'd love to pay less I think my $100/month iPhone plan is reasonable based on what I get in return.

Jun 09, 09 - 12:01 pm Comment from: doc e

OMG somebody call the waaaambulance. I cannot believe people's reaction and thinking! Check out the price of a mobile internet card which you'd have to have for your laptop IF you wanted to do all the things you can do with an iPhone. This is a mobile internet-everywhere pocket computer and you complain about spending $2.50 a day for this??

How many of you "Apple is screwing us" types drink a rockstar or one of those $3+ energy drinks a day? Or a latte from Starbucks or ANY kind of "lasts a few minutes and it's gone" luxuries? If you have an iPhone, for that SAME $2.50 you have 24 hours of use that is immeasurably more useful.

Take a look at where you spend your money each month and I'll bet you spend far more than you realize on things that give you a fraction of the value an iPhone does.

Jun 09, 09 - 12:02 pm Comment from: G Spank

the $99 price point cannot be overstated as the single most important news from yesterday. IT IS HUGE.

Jun 09, 09 - 12:07 pm Comment from: iTruth

"RIM and Palm cannot afford to sell their iPhone wannabes at such prices; they simply cannot compete."

Neither Apple nor RIM nor Palm get paid only the retail price that you pay.

What matters more is how much the cell phone company pays Palm or RIM, not what subsidized price the carrier offers you.

Jun 09, 09 - 12:14 pm Comment from: freebeer

If someone at AT&T;is smart they would offer a $99 rebate promotion now to clear out the 3G models, get wave of new 2-year contracts, pummel Palm/Sprint, and get on the good side of Apple so when the eventual iTablet comes out it'll be the exclusive carrier again. But knowing AT&T;they're probably so greedy they think putting the Pre and other netbooks in the line up in near future will help their corporate profit. But they'll be wrong, and instead give the Pre a protracted life through Sprint and Verizon too. .

Jun 09, 09 - 12:43 pm Comment from: auramac

I, too, wish everything were free- but you get what you pay for. A Windows machine at any price is not a consideration, and I wanted a Really good guitar so I paid the price. Expensive? Hell, yeah- but worth it! As are most Apple products. And it's also a myth that they're more expensive- do the math, consider cost of use and maintenance- you get your money's worth by a long shot.

Jun 09, 09 - 12:44 pm Comment from: BluMeNe

not sure why AT&T;is hosing you guys so bad, the plan i have with Rogers in Canada is running me $120 a month (For 2 iPhones) and we don't ever hit our usage cap.

Jun 09, 09 - 12:45 pm Comment from: db

100$ off the phone barely covers the difference it would cost me for ONE MONTH of use of the iPhone in Canada compared to AT&T;'s rates and plans.

I would LOVE to have an iPhone, but since I can't afford it for now, I'll stick to my 32G iPod Touch, which gives me almost everything the iPhone would, and the crappy, 4-year-old phone I've got now.

And when my 3 year (which turned out to be 4 year because of a change I made at the end of the first year) contract ends at the end of the month, I'll be switching to the company that offers (slightly) cheaper rates, no 9$/month user fee, and no contract to stick it to the cell phone company man.

When we once again become a two income household, then I may consider getting an iPhone. Hopefully by then, competition for cell phone customers within Canada will have helped reduce the draconian rates.

Jun 09, 09 - 12:47 pm Comment from: cylon

What is a bare bones plan with AT&T;that gives you unlimited web access, but the fewest amount of calls? I pay $72 a month for Verizon.

And how different is the iPhone from the iPod touch? At $99 isn't this a better deal than $229 for the iPod touch? Or is the hardware different other than phone/camera capabilities?

Jun 09, 09 - 12:52 pm Comment from: breeze

mike_in_helsinki:
Exactly - Bunch of whining ass babies. First they bitch about price, then features, then monthly fees ... never ends.

G Spank: Exactly

Whiners: Compare Features, Data plans, Build Quality, Screen size and quality, Software options, user interface and Syncing....

Compare Apples to Apples... $99 !!! UNBEATABLE - NOTHING COMPARES.

Jun 09, 09 - 12:55 pm Comment from: Liopapa

@Doc- I think paying for Wi-fi at Starbucks... or anywhere else for that matter... is a ripoff. Not when it's free at the majority of coffee shops here in Michigan...

Jun 09, 09 - 12:56 pm Comment from: thethirdshoe

@mike_in_helsinki
"Apple does not want your business."
Very true. Idiots are expensive to support. Best to not have them.
cool smirk

Jun 09, 09 - 12:59 pm Comment from: cylon

Ok I'm stupid, I thought when something said $99 it meant you could go to the store and buy it for $99 and it was your property. I didn't know you were required to actually pay for phone service with AT&T;in order to get that price or to even have one in the first place.

So iPod Touch seems to be the better deal. I hate fine print.

Jun 09, 09 - 01:06 pm Comment from: DLMeyer

While I agree that the new price-point breaks a psychological barrier for many would-be users, it still doesn't work for me. I still don't need to spend an extra penny for the extra features I can't think of a way of using. Not downing the iPhone - any model - but it's extra money (that I don't have a LOT of) for no extra value. For ME!
A $300 Mac "tablet", that I might consider. But my phone (free, with contract) already has more features than I can wrap my head around.
Maybe - MAYBE - if it was linked to Verizon. More likely "not".

Jun 09, 09 - 01:36 pm Comment from: zmarc

My ATT monthly bill for iPhone is $40.

How? It's part of a family plan. It's also the original iPhone (non-3G, which is cheaper). I only get 100-minutes a month of call time, which is way more than I actually use. I don't use much call time because I get free nights/weekends and about 90% of my cell calls are to other ATT mobile customers and are free. The unused minutes roll over, so if I travel or have a high month every now and then, it's not a problem.

I expect my bill will go up $10-$15/month if/when I upgrade to iPhone 3GS. That kinda sucks since I barely use the cell network. I would prefer if ATT would offer cheaper plans for less data usage.

Jun 09, 09 - 01:43 pm Comment from: Synthmeister

No matter how you look at it, the AT&T;plan which forces you to pay extra for text msg is ridiculous. Text messaging takes up practically no bandwidth whatsoever on their network and should be part of the data fees.

My question is, if you bought a first gen iPhone and now your commitment is up, will AT&T;allow you to sign up for just a voice plan with your original iPhone? I'd just use wifi for all my data, email and IM just like I do with my iPod touch.

Jun 09, 09 - 01:43 pm Comment from: Bizlaw

@Liopapa:

I agree about wi-fi, but if you have an iPhone, AT&T;gives you free wifi access at Starbucks.

Also, if you have a Starbucks card, and use it once a month, you get free wifi for the month and free other items, like soy milk, flavors, etc.

Jun 09, 09 - 04:35 pm Comment from: clem

Soon the iPhone will crush all competitors and we apple fan boys can rejoice as Apple will be able to raise the iPhone prices back up to $400 or $500 dollars. What a great day for us all!

Jun 09, 09 - 05:29 pm Comment from: spyinthesky

I do have to wonder if in fact, as some claimed above, that a lot of these 'contributors' are indeed paid/unpaid fud merchants. Otherwise there really must be some real idiots out there. I mean what idiot would buy the iPhone if they see it only as a phone. Would they really want to publicise their stupidity so brazenly and do so first up on here? Would they really be so dumb as to know how much their plan is, sign up to it and yet a year later complain about how much it is? And then claim that others wouldn't be equally stupid too,apparently. Hey guys just wear that hat with the big D on it.

Conspiracy Theory? Maybe but people don't generally like to publicise their own ignorance that much surely, unless they have an ulterior motive, one that actually has nothing to do with whether they even have an iPhone at all. Thinking that they are having one over those who read their little rant more than compensates for their make believe idiocy of I reckon, especially if they see some personal benefit, whatever form that may take.

Jun 09, 09 - 07:59 pm Comment from: ken1w

Yes, most of the cost of owning an iPhone is the cumulative monthly cost for the wireless plan. But most consumers don't seem to think that way. They are more swayed by the upfront cost of the phone.

That's why the $99 price tag for last year's iPhone is a big deal, considering the competition has not even caught up with copying that model, and now it costs less than half what it did last week. What are Palm, RIM, and all the rest going to do now? About the only reason left for not getting an iPhone is if ATT does not provide decent coverage in your area.

Jun 09, 09 - 10:39 pm Comment from: alansky

@fred:

AT&T;'s iPhone plans cost about the same as other voice + data smartphone plans. Anyone who says the iPhone plans are significantly more expensive is either lying or ignorant. And if you think the iPhone is just a phone, you definitely don't need one.

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