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iPhone price cut theory

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It’s been several days since Jobs pissed off the thousands of early adopting iPhone owners with his $200 price slashing of the 8gb iPhone. There have been lots of questions asking why Apple would drop the price so soon. Jobs claims Apple wants to ramp up iPhone sales for the holiday season. Frankly, I find that reason to be pretty half-baked.

Apple has already sold a million iPhones. Is there any particular reason to flood the market with iPhones? Is it that important to have a decent slice of the mobile phone market? If so, why not just give the iPhone away?

I think the real reason why Apple slashed the iPhone price is because they have the 2nd generation of iPhones close to completion. This makes perfect sense. Apple needs to sell all of the current generation iPhone parts/components already in surplus (paid for). The best way to ensure all of the current generation iPhones get sold before the 2nd gen iPhone is announced/released is to lower the price in time for the Christmas season.

2-3 weeks after Christmas, Macworld rolls around giving Jobs the perfect time to announce the 2nd generation iPhone, which will obviously be thinner, lighter, have a better screen, more storage capacity, and cost the same if not less than the price of the first gen iPhone at that point in time.

So there’s my theory on the iPhone price cut. We’ll find out in around four months if my theory is correct.

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