Guess what's back in the news. If you guessed a $99 iPhone then you just won the prize. Analysts at Royal Bank of Canada Capital Markets are predicting some changes in the Apple iPhone lineup this summer. However, the $99 iPhone predicted by Mike Abramsky doesn't resemble some of the earlier mockups of an iPhone "Nano" we've seen previously.
As you can see by the specifications above, the cheaper and highly subsidized version of the iPhone would have similar dimensions as its current model counterpart. The main differences would be lack of 3G or GPS support and a less expensive (and less included bandwidth) data plan. Along with the introduction of the basic model, Abramsky and others expect that Apple will also introduce an upgrade to the full-featured iPhone 3G.
The main upgrades from the current 3G model would be a higher-resolution screen, video recording capabilities, and up to 32GB of storage. Dan Frommer, from the Silicon Alley Insider, predicts that the higher-end iPhone will run multiple applications simultaneously and be available in a variety of case colors. Could it be possible that Apple will cannibalize its own iPhone 3G and iPod Touch sales with the introduction of an entry-level iPhone?
Frommer also reports that with the introduction of a cheaper iPhone Apple's gross iPhone profit margins could decrease up to 15% in 2010. The flip side of this equation is that Frommer predicts Apple could conquer 20% of the smartphone market. This would also mean more AppStore and iTunes sales.Apple COO Tim Cook flatly denied that Apple had any interest in pursuing a low-end iPhone model during a recent conference call.