Walmart knocked down the prices again – by more than 50% to $97 for an Apple iPhone 3Gs as of last Tuesday. So the gadget press churned out the obvious – Apple was allowing Walmart to clear out the iPhone 3Gs stock for the upcoming iPhone 4 likely to be announced at the Apple Worldwide Developers Conference on Monday June 7th, 2010. But one suspects with Apple that there is a lot more to this then clearing the aisles. Let us count the ways:
1)Apple wants to strike another stake into the heart of Windows Phone 7 and its Kin -even iPhone 3Gs has a feature set that Windows Phone 7 will be hard pressed to match in its promised Christmas intro since Redmond has already conceded that multi-tasking and cut/paste among other features will not be in the first Phone 7 OS.
2)Apple wants to steal some thunder from the launch of the highly touted Sprint/HTC EVO 4G. There is serious antipathy towards anything Android now that Google’s Android has slipped into second place to Blackberry’s RIM for smartphone market share.
3)Apple may be signaling more price competition with Dell and the flock of other smartphones and netbooks that are coming out this summer. Don’t be surprised to see some major price paring for the new iPhone 4 to keep the wolves at bay.
It is the third point that is of interest. Apple heretofore has been a very reluctant price competitor. When Microsoft offered its brutally awful Vista operating system as an easy target for Apple for nearly two years, Apple did not lower its prices but rather increased them. Then as Win PC vendors dramatically lowered their prices – the difference was Apple’s MacBooks were priced 3-5 times more expensive than the Win PC hardware equivalent. So all indications are no pricing competition with iPhone 4.
However this viewer is going contrarian and predicting that the entry level iPhone 4 will have a price of $425 to 475. You can hurl rotten eggs in the Keep an Open Eye Eyes comments below if I am too low.
There is a dual edge sword to the Open Source advantage that you cite above. Engadget cites fragmentation as vendors do indeed strike out on their own thing and proprietary plugins/apps. And app developers constantly have to look over their shoulders and make sure they don’t do something that later is distributed as open and free eliminating their niche. Finally what happens when free and open becomes free but slightly closed or worse: no longer free and now only available at a price. Look what Microsoft did to perpetually free IIS. Made it the most significant part of the Windows XP Pro upgrade and effectively charged for it that way. Google is already charging for Google Apps – is docs certain to follow?