Apple to Introduce Cheaper iPhone on Monday?

Financial Times is reporting that according to Morgan Stanley analyst, Kathryn Huberty, Apple plans to introduce a cheaper version of the iPhone.

The analyst who is citing “people familiar with the initiative”, expects a price cut of $50 or $100 which means Apple could offer an entry-level iPhone at either $99 or $149.

According to the analyst:

Apple plans to introduce a cheaper version of its popular iPhone as soon as Monday, in a move that could dramatically increase the company’s share of the market for web-surfing devices, people familiar with the initiative said on Thursday.

The analyst also believes that a $50 price cut could increase demand by 50 per cent and a $100 cut by 100 per cent. The price cuts will be subsidized by an AT&T service contract.  I’m sure AT&T won’t be complaining as more than 4.3 million new iPhones were sold in the U.S. in just the last six months of 2008 and more importantly, 40 percent of those iPhone customers were new to AT&T.

Huberty also reports that the production of the cheaper iPhone is expected to start in July.

We have already heard reports that Apple is working on various options to gain smartphone market share. A cheaper iPhone would be a good idea to achieve it. It will help AT&T to increase its subscriber base and also help Apple boost iPhone sales.

But don’t get too excited, AppleInsider points out:

Huberty is somewhat infamous for delivering the worst analysis on Wall Street when it comes to forecasting Apple's future. For Q1 2007 she predicted iPod sales nearly 20% lower than the Street's consensus figures and the company's actual sales, and she expected revenues that were a nearly a billion short of Apple's actual performance of $7.5 billion.

What do you think? Please let us know your opinion in the comments below.

[via Financial Times]