Comments on: How Low Can iPhones Go? Wal-Mart Says $99. Maybe. (Actually, I Kind of Doubt It.)

By: Pete

Pete — Sun, 15 Feb 2009 03:23:32 +0000

$100 is optima, i think

By: A Consumer’s Guide to Apple Rumors | Technologizer

A Consumer’s Guide to Apple Rumors | Technologizer — Tue, 10 Feb 2009 11:03:53 +0000

[...] or basic logic doesn’t seem to add up. For several reasons, I was instantly skeptical about a December rumor that Wal-Mart would sell a $99 iPhone. I was right. Then again, in December, 2007 I was equally skeptical that it would sell a [...]

By: Wal-Mart to Sell the iPhone: Nothing to See Here - Akshay Technologies

Wal-Mart to Sell the iPhone: Nothing to See Here - Akshay Technologies — Sat, 27 Dec 2008 04:11:56 +0000

[...] the rumor version of this news was the theory that it would offer a 4GB version for $99. But as I suspected, the retailing behemoth will sell the same 8GB and 16GB models as everyone else. (At a tiny [...]

By: KenC

KenC — Fri, 05 Dec 2008 02:46:55 +0000

Sorry, I was thinking of Henry Blodgett.

By: KenC

KenC — Fri, 05 Dec 2008 02:46:34 +0000

Actually, WalMart will probably sell it for $88, as they have a thing for 8s over 9s. I’m sure they’re supercomputer in Benton Arkansas told them that their shoppers prefer it that way.

If you add the $88 to the $360 subsidy from AT&T that’s still $448 per phone. The gross cost for the iPhone was $315, presumably that might drop to $300 if it’s only got 4 gigs of ram, so about $148 in gross income, which is interestingly still 33.8% gross margin, right in line with Apple’s typical gross margins.

Didn’t you propose a month or so ago that Apple should drop prices by $100, and do the same math?

By: Dale Larson

Dale Larson — Thu, 04 Dec 2008 17:04:55 +0000

If you’d posted this a month or two ago, I’d have suggested that the biggest reason not to do a $99 Walmart-exclusive iPhone would be either 1) damage to the iPhone brand (since it will no longer be perceived as premium) or 2) component availability/manufacturing capacity to meet demand across the line.

Today, when Nokia is predicting a slightly contracting mobile market in 2009, this makes a lot more sense. Apple probably has capacity to more more phones than it thinks it now will at full price.

I can easily imagine the case that WalMart will more more additional $99 iPhones with an exclusive than would be lost in profits from stocking it in Apple and AT&T stores.

The reduced price has nothing to do with the actual cost of the reduced memory and everything to do with positioning, marketshare and with subsidies and/or loss-leadership.

Could AT&T offer a more budget conscious plan for the WalMart phone? Would we call the combination the Redneck iPhone? How would American culture be changed?

By: Paul

Paul — Thu, 04 Dec 2008 16:18:03 +0000

Remember a $199 or $299 phone still costs $599 and $699 respectively and AT&T has to subsidize Apple for the difference.

So if Walmart does sell a $99 phone, who will subsidize it, Walmart or AT&T?

Apple is not going to sell the phone for anything less than $499, I suspect.

Paul