There Already Is a Cheap iPhone

Image from Apple invitationThe oddest thing about the rumors bubbling around Tuesday Apple media event is the speculation about a “cheap” iPhone. Gizmodo, for example, published blurry pictures of quality-control rejects from Foxconn’s new plant in Brazil as “proof” of the imminent new cheap iPhone.

We know very, very little about the new hardware that Apple will announce; after losing an iPhone 4 prototype the last time around, Apple has done an even better than usual job of controlling leaks this time. But we can be very sure of what the “cheap” iPhone will be.

Apple’s practice for iPhone releases has been to keep the one-back model in the lineup while introducing a new phone as the premium product. At AT&T today, you can buy a 16 gigabyte iPhone 4 for $199 or an 8 GB iPhone 3GS for $49 (Verizon only has the iPhone 4 because there never was a CDMA version of the 3GS.)

So whatever the new iPhone model is and whatever it is called, we can expect the 15-month-old iPhone 4 to continue to be available, at sharply reduced prices. Maybe Apple will shave the price a bit by offering an 8 GB version, maybe not. But Apple has already said that the new iOS 5.0 software will run on the older iPhone, so it could be an attractive buy.

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Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.

5 thoughts on “There Already Is a Cheap iPhone”

  1. Tied to a 24-month $80/mth contract, that “cheap” phone costs $1969. As a spare phone for a VZ user to take to Europe or China, not quite the great deal.

    PS: to see the pre-subsidized cost, merely look at your sales receipt: in CA, anyway, tax charged on the unsubsidized cost. E.g., my recent $200 iPhone 4 was really $600.

    Still waiting for an inexpensive iPhone. I don’t ever expect to see a “cheap” one, however.

    1. Good point. When you consider the contact price, no smartphone is cheap. But the evidence suggests that the initial price of the phone does make a difference in consumer behavior, probablby more than it should if buyers considered the cost over the life of the contract/

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