What's next for Apple
There's word that Apple (Stock Quote: AAPL) is secretly planning to launch an entry-level iPhone, one that will retail for just $99. Apple has usually announced and released its iPhones at the beginning of the summer season.
According to a research note by RBC Capital Markets, analyst Mike Abramsky said that Apple will launch the entry-level device alongside an iPhone 3G performance upgrade in June or July. He forecasts that a $99 iPhone could increase unit sales by as much as 69%. If you do the math, that could lift Apple's share of the smartphone market to as much as 19%.
But aside from the possible jump in market share, Abramsky adds that Apple would risk cannibalizing its own profits. He believes that Apple would have to sell three new $99 iPhones to replace the gross profits of one 3G iPhone. In addition to their smartphones, the new device could also affect sales of certain models of the iPod, which retail at similar price points.