Filed under: Analyst reports, Products and services, Competitive strategy, Apple Inc (AAPL)

In business school, MBA students play a marketing strategy game where they launch imaginary electronics products, using phantom research & development dollars and marketing expenditures to position the products as high-end or low-end, to market to certain audiences, and then to change the price point to attract the maximum sales possible. It’s a delicate game meant to emphasize how consumers value products; and how some will not purchase a product if it’s too inexpensive; the low price devalues the item. It’s a quest for the perfect price.

Smartphones have been on that quest, with Apple Inc. (NASDAQ: AAPL) in the lead. No company seems to more attentively strategize its price points than Apple, and the iPhone has a storied history, first launched for $599 and $499 for the 8GB and 4GB models, respectively, followed swiftly by a $200 price cut for both products. Now the new 8GB iPhone 3G is $199 if you buy it with an AT&T phone plan (and $299 for the 16GB version).

In a research note yesterday, analyst Charlie Wolf of Needham Research said he’d done the analysis and Apple could safely sell the 8GB version for $99, a price point that, with the subsidy from AT&T, would protect its margins at 42.3% (I need to see the numbers on this), and certainly convince holdouts like me (the refurb Blackberry I use was free with the contract subsidy) that the iPhone is the thing. At this price, surely the game would be a landslide in Apple’s favor. The iPhone is more beautiful, more useful, and has more geeky cred than the Blackberry; at $99, I agree that the market would be won and to the iPhone conqueror would be the spoils.

iPhone at $99: Would that be the smartphone market conqueror? originally appeared on BloggingStocks on Tue, 28 Oct 2008 18:29:00 EST. Please see our terms for use of feeds.

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