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article imageApple yields to subsidies for iPhones

By Chris V. Thangham     Jun 8, 2008 in Business
Apple always demands a premium for its product but in the case of iPhones, it will yield to subsidy requests from the phone companies.
Apple seldom gives discounts when it launches new products. It doesn’t offer any rebates or drop in the value unless it wants to clear its inventories. The previous iPhone remained $399, but now the companies are demanding Apple to give them subsidies so they can lure more customers. And Apple seems to have relented and will confirm it this Monday.
Mobile companies offers phones at low initial prices and make up the difference with monthly data plans, and they want to do the same for the new iPhone 3G, which will be launched this month in more than 50 countries.
The phone companies in partnership with Apple will most likely sell the iPhone at $200 in the U.S. and in European countries.
Apple has reported that it sold 1.7 million iPhones and with this low price it can reach the goal of selling 10 million iPhones by 2008.
Apple also has agreed to forego a portion of the monthly revenue from the data plans to boost the sales and meet the initial costs for the phone companies. According to inside sources of Financial Times, Apple has agreed this arrangement with the following partners: AT&T, O2 (in UK), France Telecom and Deutsche Telekom.
If Apple sells the new iPhones for $200, I am sure it will be a bigger success for Apple this time compared to last year’s iPhone introduction.
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