Apple Inc halved the price of its entry-level iPhone to US$99 on Monday to widen the trendy device’s mass-market appeal, as global competition heats up after Palm Inc launched the Pre.
Apple also cut prices on several of its Mac notebooks amid a tooth-and-nail battle among computer makers for buyers during the recession.
And to shore up its hold on the smartphone market, it unveiled a new, faster, high-end iPhone that takes videos and has voice features, matching offerings by rivals Palm and Research in Motion’s BlackBerry.
PHOTO: BLOOMBERG
Analysts said sales could double for the cheapest iPhone.
Apple chief executive Steve Jobs, on medical leave since January, did not put in a much speculated-about appearance.
The next-generation iPhone 3GS — the “S” stands for speed, double that of the original model — goes on sale in the US, Germany and elsewhere next Friday for US$199 to US$299.
“They plugged the hole in the offering of the 3G iPhone,” Gartner analyst Van Baker said, referring to the new features.
A rambunctious crowd livened up Apple’s annual Worldwide Developers’ Conference in downtown San Francisco on Monday, whooping and applauding as executives unveiled everything from a cheaper Mac Air notebook to a new operating system.
Shares in Apple closed 0.6 percent down at US$143.85 — after a 6.5 percent climb in the week leading up to the highly anticipated event — as Jobs failed to show and investors debated the merits of the sharp iPhone price cut.
Morgan Stanley estimates that an entry-level iPhone, at what Apple marketing chief Phil Schiller calls a “breakthrough price of US$99,” could double existing sales. That is for the 8-gigabyte model previously priced at US$199.
Apple said it had sold more than 40 million iPhones and iPod Touches to date, up from the 37 million reported during a quarterly earnings call in April.
The new iPhone models and price cuts announced on Monday came days after Palm launched its Pre smartphone, which some analysts say is the iPhone’s closest rival.
Sprint Nextel Corp, which has exclusive US rights to carry the Pre, said it had record sales of the smartphone in its first weekend, and was restocking the phones “as quickly as Palm could make them.”
The US$99 iPhone will cost half as much as the US$199 Pre. By slashing the price of the 8-gigabyte iPhone and rolling models out this month, Apple’s strategy appeared designed to take advantage of the Pre’s limited availability, CL King & Associates’ Lawrence Harris said.
In a note to investors on Monday, he estimated that Palm produced just 50,000 Pre phones last month.
AT&T, the exclusive US service provider for the iPhone, will sell the 16-gigabyte 3G for US$149, down from US$299, while supplies last.
Competition is intensifying among cellphone makers from Nokia to HTC Corp for a slice of one of the few remaining fast-growth tech markets.
Globally, research house Ovum expects smartphone shipments to reach 171.9 million this year, rising 23 percent from last year to account for about 15 percent of the worldwide mobile phone market this year.
But the battle in that lucrative arena is eroding margins.
Apple executives did not comment on impact to profitability from the cheaper iPhone or Mac Air — which at US$1,499 is still costlier than computers from the likes of Dell Inc or Hewlett-Packard Co.
AT&T said the halving in price would not affect its profit targets and that it was sticking to its objective for wireless margins in the low 40 percent range.
Much of Monday’s event was taken up with new features for Apple’s best-selling gadget. Executives announced that new iPhones will support TomTom satellite navigation devices and support multiplayer games such as Asphalt 5.
The consumer electronics giant showed off a new 15-inch notebook with improved battery life, a US$300-cheaper Mac Air — its thinnest laptop — and, as expected, its highly previewed “Snow Leopard” Mac operating system software.
The company also unveiled a new 13-inch MacBook Pro starting at US$1,199, and a 15-inch laptop with longer battery life, addressing a perennial consumer concern.
Also See: [ TECHNOLOGY REVIEWS ]
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
CRITICAL MOVE: TSMC’s plan to invest another US$100 billion in US chipmaking would boost Taiwan’s competitive edge in the global market, the premier said The government would ensure that the most advanced chipmaking technology stays in Taiwan while assisting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in investing overseas, the Presidential Office said yesterday. The statement follows a joint announcement by the world’s largest contract chipmaker and US President Donald Trump on Monday that TSMC would invest an additional US$100 billion over the next four years to expand its semiconductor manufacturing operations in the US, which would include construction of three new chip fabrication plants, two advanced packaging facilities, and a research and development center. The government knew about the deal in advance and would assist, Presidential
RSS