Uncommon Wisdom

Mar 1 2010   2:05PM GMT

Lower Apple iPhone prices could pressure AT&T upgrades

Tom Nolle Tom Nolle Profile: Tom Nolle

Apple may be planning to lower its iPhone pricing to reduce the risk of losing the low end (where the growth likely is) of the smartphone market to competitors. The move may also be necessary to keep AT&T and other operators that have iPhone alliances from pushing competitive models more suited to the budget of the average phone buyer.

It’s hardly unusual for companies to target premium buyers in their early models, and that’s particularly true of Apple, which relies so much on cache to sell its stuff. A cheaper iPhone could create stress for AT&T, though: Too much success would boost traffic and force the carrier to accelerate its upgrade of wireless backhaul. The question is whether Apple would make a change without considering 4G migration, which is in the cards for AT&T and most other Tier 1 mobile operators by the first half of next year.

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