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Apple launches new iPhone, cuts prices

Text by Sébastian SEIBT

Latest update : 2009-06-09

Apple unveiled an unprecedented cut in iPhone prices on Monday, at the same time as it unveiled the faster, smoother third generation of the iconic touch-screen mobile phone and organizer.

A faster, slicker, more powerful iPhone and lower prices on older models: those were some of the goodies promised in Apple’s latest product presentation on Monday.

Mac fans are doubtless licking their lips in anticipation. In Apple world, it’s out with the old and in with the new, faster than you can say Macintosh.

The iPhone 3GS (the S stands for “speed”) is the third version of Apple’s iconic mobile phone in barely two years. It will be available in 20 different countries, including France and the United States, starting June 19.

Phil Schiller, senior vice president of worldwide marketing at Apple, announced the unprecedented cut in prices that accompanied this new model: previous generations of iPhones will cost $99, dropping under the symbolic 100-dollar bar. That’s 50% less than the current price. The latest model will be sold at an opening price of $199.


Competitive price cuts

Apple, not best known for its attractive prices (a Mac typically costs about $100 more than the average PC) seems to have finally tuned in to the current economic slowdown, betting that lower prices may win it a broader audience, a change of heart that seems to have come in the nick of time given the fierce competition in the Web-mobile field.

The Palm Pre, released in the United States on June 6, is considered by many specialists as the most serious of “iPhone killers”. The phone company Sprint, which distributes the Palm Pre in the United States, says it has sold more than 50,000 units over the first weekend after it was launched. The only hitch is its price: $199, designed to mirror the iPhone. In view of Apple’s latest price cuts, it suddenly becomes far less competitive.

Apple’s 50% price could increase its sales by 100%, said Gene Munster, an Internet and media analyst at Piper Jaffray.

Apple will extend its new price-cut strategy to all Mac products.

In September, it will launch a new operating system, Snow Leopard, in competition with Microsoft Windows 7. By offering upgrades to the new system for $29, Apple hopes to hit its arch-rival where it hurts most: the wallet. Microsoft sells its system upgrades for $50 and shows no signs of lowering the price.

Date created : 2009-06-08

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