Analyst: 35% of iPhone 3G buyers will get it for $199
The pricing of the next generation iPhone may be a point of confusion on Friday and Piper Jaffray analyst Gene Munster expects only 35 percent of buyers will get the $199 price. As a result, initial sales of the iPhone 3G may be diluted.
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Though Apple advertises the 8GB iPhone 3G will sell for $199, we estimate that the average entry level price point will actually be $407. Our price increase includes customers not eligible for the carrier subsidy and the activation fees that AT&T will be charging. We believe that roughly 35% of AT&T subscribers will be eligible for the $199 price. Our $407 price reflects data from our survey of more than 200 mobile phone users.
According to Munster's survey 8.7 percent of iPhone users are AT&T upgrade eligible, 12.6 percent of them are not eligible for an upgrade and 78.7 percent are new AT&T users. Munster reckons that buying will really pick up when the total cost of the iPhone nears $199 including all of the AT&T fees.
We believe that most buyers do not fully grasp iPhone 3G pricing. Pricing misperceptions and our survey lead us to believe buyers will wait until their contract on their current carrier expires, or AT&T subscribers become upgrade eligible. As a result, we believe initial iPhone 3G sales will be diluted, but that sales will increase over the next 18 months as the average cost decreases (i.e. as subsidy eligibility increases).
Munster still expects Apple to ship 45 million iPhones in calendar year 2009. He predicts mobile phone market share of 8 percent for Apple in 12 months up from 3 percent today.
Also see: Apple's iPhone app parade begins; Salesforce, Oracle get early jump