In a report published Monday, Kaufman Bros analyst Shaw Wu compared the trend to that of DSL and broadband pricing, which has fallen considerably over the past several years.
"It used to cost $50 per month for access and now there are many plans for $15-$20 per month as well as faster tiered pricing," he said. "Customer adoption of broadband accelerated as pricing dropped."
While top tier providers AT&T and Verizon have yet to follow their smaller rivals with similar reductions, Wu thinks it may be only a matter of time before they do, or at least consider implementing several more tiers of internet data pricing.
"Sprint's Boost Mobile unit now offers a $50 plan that includes unlimited talk, messaging, web, and walkie-talkie while T-Mobile is test marketing a $50 unlimited voice plan and $25 more for unlimited data/Internet," he wrote. "This compares to $130 for both AT&T and Verizon for unlimited voice and unlimited data/Internet."
The analyst cites high service plan pricing — as opposed to hardware pricing — as the cause for slowing iPhone sales and reduced smartphone adoption in general. And while he acknowledges that Sprint and T-Mobile aren't catering to the majority of smartphone customers, he believes their "lower prices will likely help them participate more in this secular trend and cause AT&T and Verizon to also lower prices in response."
Going forward, Wu said any reduction in service plan pricing at AT&T and Verizon would be seen as a positive that should help smartphone adoption remain healthy despite the troublesome economy.
For the current quarter ending March, Wu is 'erring on the conservative side' and modeling Apple to sell approximately 3 million iPhones. However, his supply chain checks suggest the Cupertino-based company could actually sell anywhere from 3.25 to 3.5 million of the handsets.
In recent weeks, several Wall Street analysts have combined to suggest that some of the biggest news surrounding the next generation of the iPhone will be pricing. Wu cited his own sources as saying that Apple and AT&T are discussing the possibility of offering customers more data plan options, while Bernstein's Toni Sacconaghi came away from a chat with Apple interim chief Tim Cook believing the company is looking into "different pricing/price points" for the next-gen handset itself.
On Friday, RBC charted over a half-dozen emerging iPhone competitors as yet another reason why Apple and its wireless partners may inevitably elect to trim the cost of owning the touch-screen handset.
55 Comments
LOL, I need to hurry up and put mine on ebay.
LOL, I need to hurry up and put mine on ebay.
The iPhone price will stay the same its the monthly service plan charges that 'should' drop.
I have been saying all along that the thing holding up more rapid adoption of the iPhone is NOT the price of the hand set.
God, $200 is NOTHING when you figure that the service will cost NO LESS than $1,680 over 2 years, and that is before cell plan taxes.
I just don't see a price cut to $100 for the phone making that much of a difference.
BUT-a voice and data plan that included some sort of texting (400?) for $50 per month per line WOULD BE THE "KILLER APP" for adoption.
Like I said before, service pricing is the only reason I don't have an iPhone.
I have to say that I find O2's pricing in the UK really reasonable, I am on the £35 a month contract (around $50) which gives me the unlimitted internet and a fair amount of calls/texts.
From what I can see the American pricing is a rip off, especially as Americans seem to have to use their minutes when people call them as well as when dialing out (I could be wrong here)
Roll on competition worldwide, bring those prices down!