I admit it. I have absolutely no hard evidence for what I am about to say. None-the-less, I am almost certain it is true: New iPhone model(s) will be introduced at Macworld Expo in January.
What’s the basis for this prediction? It all comes down to parsing Apple’s (and Steve Job’s) language regarding the just announced price drop for the current iPhone.
Take a look at the Apple press release regarding the price drop. The release is titled “Apple Sets iPhone Price at $399 for this Holiday Season.” It goes on to state that Apple wants to “make iPhone affordable for even more customers this holiday season.”
Notice that the expression “holiday season” is always included in any mention of the price drop. Why? Why not just say, for example, that Apple wants to “make iPhone affordable for even more customers” without the “holiday season” addition?
It happens again in Steve Jobs’ “open letter” to iPhone customers, where he writes that all of us who purchased an iPhone prior to the price drop will get a $100 credit at the Apple Store. In this letter, he states: “iPhone is a breakthrough product, and we have the chance to ‘go for it’ this holiday season.” A few sentences later, he writes: “We strongly believe the $399 price will help us do just that this holiday season.”
Once again, there is that repeated and unneeded addition of the phrase “this holiday season.” Why?
I believe the answer is that the price will go up again after the holiday season is over. I specifically asked Apple reps about this at the Special Event on Wednesday. They denied there was any plan to raise the price in January. But their wording did not entirely rule the possibility. Just because there is no “announced” plan, for example, doesn’t mean that there is not an unannounced one. In any case, Apple reps at a “hands-on” display of new products are not about to reveal anything about Apple’s future plans that Steve himself had not revealed. So I don’t put much stock in these denials.
However, I seriously doubt that Apple will simply raise the price of the same 8GB model that is on sale now. Raising the price of an existing product is almost never done in this business. If anything, prices go down for existing or even improved technology over time; not the reverse.
So, if as I predict, the price will go up again in January, the justification for the price hike must be that a new model (or models) will be replacing the existing iPhone. Given the current price drop from $599 to $399, I expect that the price will not jump back to $599 again. Instead, my guess is that we will see a new iPhone model priced at $499. This could be simply a 16GB iPhone. Such a move would make sense because, with the 16GB iPod touch selling for $399, it would be awkward to offer a 16GB iPhone for the same price. Or, just as likely, Apple could introduce an “iPhone 2.0” with new features such as built-in GPS.
The only thing that doesn’t quite fit in this picture is this: Even if a new and improved iPhone is coming in January for $499, why not continue to sell the existing iPhone for $399? If that is the plan, all the caveats about “this holiday season” would not be required, as the $399 price would remain in place. So if my theory is correct, this is not going to happen.
Perhaps Apple isn’t quite ready to make $399 the permanent price point for an entry level iPhone. They still believe they can get the sales they want and maintain the higher margin of a $499 price. So they use the introduction of the new model to get rid of the lower price. Perhaps. Or perhaps it’s something else.
Regardless, I remain convinced that the repeated use of the “holiday season” phrase is not just superfluous language on Apple’s part. There is a reason behind it. And now you have my theory as to what that reason is.