Citing only "people familiar with the initiative," the Financial Times claims that Apple plans to release an iPhone model with a substantially lower retail price in order to boost sales, and that the introduction could happen as soon as the opening day of WWDC.
"The anticipated new phone is likely to start production in July with the third version of the iPhone operating system, also expected to be released next week as a free upgrade for existing iPhone owners," the article stated, noting that Apple declined to offer any comment.
It's been previously reported that Apple is expected to deliver a series of new iPhones, including a possible 4GB low-end model. Mainstream new iPhones are expected to deliver a faster processor, more working RAM, faster mobile and WiFi networking, an improved camera and an electronic compass, in addition to the software features to be delivered in iPhone 3.0
Analysts have been predicting that Apple would cut the upfront price of the iPhone for some time, but the idea that the company would announce a cheaper version as early as Monday is provocative in that Apple faces little competition that would compel such a significant price cut.
The Financial Times cited Morgan Stanley analyst Kathryn Huberty as saying, "it's either a $50 or a $100 cut" based on a survey of consumers that indicated a $50 drop "could increase demand by 50 per cent and a $100 cut by 100 per cent."
Huberty is somewhat infamous for delivering the worst analysis on Wall Street when it comes to forecasting Apple's future. For Q1 2007 she predicted iPod sales nearly 20% lower than the Street's consensus figures and the company's actual sales, and she expected revenues that were a nearly a billion short of Apple's actual performance of $7.5 billion.
Last fall, Huberty cited general weakness in the "global macro-economic environment" for dramatically lowering her price targets for Apple stock, although the company's actual results since then have proven seemingly recession-resistant in marked contrast to the PC industry in general.