While consumers wait to find out how much AT&T is going to charge for iPhone 3GS data packages — and how much the wireless carrier will ultimately charge existing iPhone customers to upgrade to the third generation of the market-shaking device — Apple is setting new pricing standards in the smartphone industry.
The iPhone 3GS is up to twice as fast as the iPhone 3G. It offers twice the capacity for the same price with a 16GB model for $199 and a 32GB model for $299. The iPhone 3G is now available at $99 for the 8GB model. Keep in mind that the $99 price is not for a refurbished handset from Best Buy. These are brand new phones.
“Apple raised the bar once again in terms of technology and features and it remains the standard for everyone else to try to emulate,” said Michael Gartenberg, a vice president at Interpret. “But at the same point Apple redefined price performance as well with the $99 iPhone and that’s going to put a lot of pressure on the competition to respond.”
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The newest competitor is the Palm Pre. Earlier this week, Sprint reported a record sales debut with the Pre. The Pre sells for $199 with a two-year Sprint contract. That puts it on par with the new 16GB iPhone 3GS, but Apple has the smartphone market beat on pricing with the cuts on the second-generation model.
“Nearly all of the signature phones that came out last year debuted at about $199, like the Bold or the Storm or the G1. The Pre met that expectation,” Gartenberg said. “Now, Apple is setting the new bar at $99 — and it’s not for a stripped down product or a product that’s feature-limited. This was Apple’s flagship product as of a week ago. So…