At&t Preparing to Slash 3g Iphone Retail Price

AT&T is reported to be preparing to slash the price of the iPhone by US$200 per unit when the long anticipated 3G model is launched. Unnamed sources have told Fortune magazine that the company will bring the price of the 8GB memory 3G model down to US$199 for customers who agree to sign a two-year contract.

AT&T and Apple declined to comment on the report.

If the report is correct, the US$200 subsidy, or possibly a cash-back following purchase would only be available within AT&T stores and would not be offered by Apple itself. The average iPhone user tends to have around double the typical US monthly spend, which would make it easier for AT&T to finance a higher subsidy. If the handset is sold with a subsidy, then it is certain that the activation process will need to be carried out in the retail store - whereas a cash-back model would allow Apple to continue its current policy of selling the phone without managing the activation process itself.

It was recently reported that Foxconn has secured orders for a 3G iPhone, with anticipated shipments of 3-4 million units in the first month after its launch. Apple is widely expected to announce the new phone at their June tradeshow.

On the web: Fortune

Posted to the site on 30th April 2008

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