New iPhone Could Cost As Little As £100 In UK

Reports are appearing from several reliable sources that the new iPhone would cost as low as £100 in the UK. It is expected that Apple CEO, Steve Jobs, will unveil the new phone during his speech at the Worldwide Developers’ Conference in San Francisco next week, on June 9.

Tom Peterkin of The Telegraph reports, “Analysts expect Apple to allow mobile-phone operators to subsidise the touch-screen handset, which uses third-generation technology to ensure much faster internet access. In some parts of Europe the gadget could be on sale for as little as £60. In Britain, where the mobile phone operator O2, has a multi-year exclusive deal for the iPhone, the price is likely to be closer to £100, analysts said.That represents a significant reduction on the original retail price of £269.”

Price cutting and ending exclusivity would help Apple meet its ambition of selling 10 million iPhones by the end of the year.

The approach would mark a departure from Apple’s previous strategy whereby operators pay up-frong for the iPone selling it to customers with a small mark-up plus VAT while paying around 15 per cent of average revenue per user to Apple.

Lilly Peel, of The Times, writes, “Cutting the price and ending exclusivity will help Apple to meet its target of selling ten million iPhones by the end of the year. It is a long way short of that. At the end of December the exclusive carriers for Britain, Germany and France - O2, T-Mobile and Orange - had sold 330,000 phones between them, but industry sources say that European iPhone sales were forecast at 500,000 to 600,000 units.”

The reason, Peel speculates, is that the market strategy formerly used by the U.S. company has not worked in the UK and Europe. “Apple’s former strategy - in which operators pay upfront for the iPhone, sell it to customers with a small mark-up plus VAT, and pay an estimated 15 per cent of average revenue per user to Apple - has begun to crumble in Europe. In April Tim Cook, Apple’s chief operating officer, said that carriers were free to price the iPhone as low as they wished and followed it with a U-turn on operator exclusivity.”

Whatever the reason, if reports are correct and the new iPhone not only offers more to its owner, but comes at a lower price, it will be hard to resist.

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