Apple drops iPhone to $99
Apple Inc. slashed the entry price for an iPhone in half and rolled out laptops for $300 less than previous models Monday, the company’s first dramatic price cuts since the recession began a year and a half ago.
Apple unveiled a new model of the iPhone — the 3G S — that looks the same but will sport a faster processor, longer battery life and sought-after features like an internal compass, a video camera and a photo camera with better resolution and auto-focus. A 16-gigabyte version of the 3G S will cost $199 and a 32-gigabyte version will be $299.
The 8-gigabyte iPhone 3G, which came out last year, now costs $99, instead of $199. When the iPhone debuted two years ago, eager Apple fans had to shell out $499 for a 4-gigabyte version and $599 for 8 gigs.
The iPhone news was the highlight of a two-hour presentation by Apple executives at their annual conference for software developers.
Apple is known for ending these kinds of events with a last-minute surprise, leading to some anticipation that CEO and co-founder Steve Jobs might make a cameo.
But Jobs, who is due to return from medical leave at the end of this month, did not take the stage. Apple’s top marketing executive, Philip Schiller, exited without uttering the company’s signature line that there would be "one more thing."
The latest iPhones go on sale June 19, just as two-year contracts for the buyers of the original models are expiring and Apple’s phone faces tougher competition from the likes of Research in Motion Ltd. and Palm Inc., which just came out with the $200 Pre smart phone.
Shares of Cupertino, Calif.-based Apple slipped 82 cents to close at $143.85.
Lowering the price of the least expensive iPhone could be risky for Apple, which is betting the new versions have enough appealing features to keep higher-priced models selling briskly.
AT&T Inc., the exclusive carrier of the iPhone in the U.S., said Monday it’s confident its wireless profit margins will hold steady overall. AT&T shares fell 16 cents to $24.40.