Here’s an intriguing idea on how Apple could dramatically increase its addressable market: cut the subsidized price of the iPhone 3GS to $0. That idea comes this morning from RBC Capital analyst Mike Abramsky.
“As its entry-level iPhone strategy, Apple is expected to cut iPhone 3GS to $0 (on contract, $399 unsubsidized) in conjunction with iPhone 5 launch,” expected in September, he writes in a research note. “This approach is intended to target mid-market smartphone buyers and counter Android’s mid-market expansion.”
Abramsky expects iPhone 5 to launch at $199 and $299 on a subsidized basis, with iPhone 4 dropping to $99.
Apple already sells the 3GS for just $49, but adds that a free iPhone “provides a compelling offer.” He writes that a proprietary survey of finds a free version of the phone would double the company’s global market opportunity and re-accelerate iPhone share growth outside of North America.
Meanwhile, the analyst writes that he continues to expect Apple to launch a smaller, pre-paid version of the phone in 2012.
Abramsky keeps his Outperform rating and $450 price target on the stock.
“As its entry-level iPhone strategy, Apple is expected to cut iPhone 3GS to $0 (on contract, $399 unsubsidized) in conjunction with iPhone 5 launch,” expected in September, he writes in a research note. “This approach is intended to target mid-market smartphone buyers and counter Android’s mid-market expansion.”
Abramsky expects iPhone 5 to launch at $199 and $299 on a subsidized basis, with iPhone 4 dropping to $99.
Apple already sells the 3GS for just $49, but adds that a free iPhone “provides a compelling offer.” He writes that a proprietary survey of finds a free version of the phone would double the company’s global market opportunity and re-accelerate iPhone share growth outside of North America.
Meanwhile, the analyst writes that he continues to expect Apple to launch a smaller, pre-paid version of the phone in 2012.
Abramsky keeps his Outperform rating and $450 price target on the stock.
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