iPhone price cut pressuring smart phone rivals

Tech News

By Stevie Smith Sep 10, 2007, 14:23 GMT

Apple Inc. may be making its first foray into the mobile phone arena with the innovative iPhone handset, but that lack of traction certainly hasn’t prevented the California-based company from perhaps ruffling the feathers of some established players.More pointedly, the sizeable hardware price cut that Apple last week applied to its 8GB iPhone – bringing it down from $599 USD to a much more pocket-friendly $399 USD – is more directly placing the diminutive touch-screen phone beside existing products offered up by the likes of Motorola and Palm.With the $399 USD drop positioning the iPhone alongside popular brands such as the Motorola Razr2 and Palm Treo, Apple could well attract a much broader chunk of the demographic beyond the dedicated Apple fan base that lined the streets and snapped up an iPhone when it was first released to retail on June 29 of this year.Although more wide-ranging manufacturers such as Nokia, Samsung and LG are likely to be unaffected by the singular iPhone, Palm Inc. has conceded that Apple’s device will likely mark a brief dip in demand for the Treo handset, which sold some 2.7 million units during the fiscal year for 2006. And that concern has been further echoed by Oppenheimer analyst Lawrence Harris, who told the Reuters news agency that the huge $200 USD price reduction "has the potential to take away from Treo sales.The Treo, firmly established with business users for the advantages of mobile Web surfing and e-mail access, presently costs as much as $399 USD (via Verizon), and also comes in at $199 USD (via Sprint Nextel) on a fixed agreed contract. Harris also offered that Apple’s price cut might see Palm pushing further into the lower end of the mobile market with the likes of its $99 USD Centro, which is expected to hit retail at the beginning of the fourth quarter.Although some analysts have suggested Palm’s positioning is unthreatened by Apple’s arrival and that the iPhone is not expected to pose a serious long-term challenge in the smartphone space, it is perhaps worth noting that Apple is aiming at 1 million unit sales by the close of September (Q3), and is looking for a full 10 million by the end of 2008.With regard to Motorola and its out-of-favour Razr line, which was recently bolstered by an enhanced model entry in the form of the $250 to $300 Razr2, Harris sees the company as possibly feeling the pressure to announce some fresh products or a new creative direction to its investors during its upcoming analyst day.

View blog reactions

If you liked this story please support M&C and Buzz the site on Yahoo.

Latest Headlines in Tech

Talkback

There are currently no comments for this article. Be the first to comment! (no registration required)

Latest from M&C Blogs

Debate: did McCain do enough? - Global Eye on September 29, 2008 6:46 AM | Permalink | Comments (22) | TrackBacks (1)

Should Sen. John McCain's health records be made public? - Global Eye on September 15, 2008 8:39 AM | Permalink | Comments (50) | TrackBacks (0)

Propaganda and the campaign for president - Global Eye on September 9, 2008 7:12 AM | Permalink | Comments (10) | TrackBacks (0)

London Film Festival - Dean Spanley - London Calling on October 6, 2008 9:38 AM | Permalink | Comments (0) | TrackBacks (0)

Raindance Film Festival: Gardens Of The Night - London Calling on October 6, 2008 9:21 AM | Permalink | Comments (4) | TrackBacks (0)

London Film Festival - IL DIVO Review - London Calling on October 1, 2008 3:46 PM | Permalink | Comments (0) | TrackBacks (0)

Bugatti Veyron 16.4 Grand Sport - The World in Pictures on October 2, 2008 4:15 PM | Permalink | Comments (1) | TrackBacks (0)

Devotee to Chinese Shrine of Sapam has face pierced - The World in Pictures on October 2, 2008 4:13 PM | Permalink | Comments (0) | TrackBacks (0)

Indian Muslims offer prayers on the occasion of Eid-al-Fitr - The World in Pictures on October 2, 2008 4:11 PM | Permalink | Comments (1) | TrackBacks (0)

Tech

iPhone price cut pressuring smart phone rivals

Tech News

Latest Headlines in Tech

Talkback

Latest from M&C Blogs

Similar articles

In Monsters and Critics

Corporate

The Fine Print