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Apple May Cut IPhone Price In Early 2009

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Bloomberg News

Published: January 1, 2009

Updated: 01/01/2009 12:22 pm

Apple Inc. will probably begin selling a lower-priced version of the iPhone in the first half of next year, tapping a new chipmaker for a key component, according to Friedman, Billings, Ramsey & Co.

Qualcomm Inc. will replace Infineon Technologies AG as the supplier of the baseband processor - the chip that translates radio signals into voice and data - in the new model, analyst Craig Berger said Wednesday in a report. The phone might debut in the second quarter, he said, citing unidentified industry sources.

Apple may be turning to lower-cost products to fuel sales next year as the economy shrinks. The company is planning a new smaller version of its Shuffle music player and a cheaper MacBook laptop, Berger said. None of the devices is likely to be ready to be unveiled at next week's Macworld conference, where Apple typically makes product announcements.

When Apple first launched its iPhone in the United States in 2007, the company priced the device at $499 and $599. Less than three months later, it cut the price by $200. It's newest 8-gigabyte 3G version is priced at $199 with a phone service contract.

Published reports suggested Wal-Mart would carry the iPhone for $99. The retailing giant began selling the phone, but not at the $100 discount.

Jennifer Bowcock, Apple's spokeswoman for the iPhone, didn't immediately return a call or e-mail seeking comment. San Diego-based Qualcomm's Bertha Agia also didn't immediately return a phone call.

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