iPhone News Updated

iPhone price slashed

iPhone price slashed

New agreement between Apple, AT&T allows carrier to sell device for $199

Not long ago, buying an iPhone meant forking over $499. But when the new iPhone 2.0 launches in July this year, it will offer significantly faster data speeds at less than half the original price.

AT&T Mobility CEO Ralph de la Vega says his company has signed an exclusivity agreement with Apple that has given AT&T the flexibility to drastically cut the price for the popular device and attract more users for its 3G mobile broadband services. Under the new agreement, AT&T will no longer share revenue generated by the iPhone with Apple, and will instead only give Apple upfront payments for the devices and will pay Apple a commission when a third-party retailer sells and activates the device within their stores.

Because AT&T no longer has to share its customer revenue with Apple, de la Vega says the company has been able to cut the 8GB iPhone price down to $199, while similarly slashing the 16GB iPhone price to $299. In September, Apple cut the the price of the 8GB iPhone to $299, and also cut the 16GB iPhone to $399.

De la Vega says the iPhone 2.0 will have a minimum monthly voice plan of $39.99 per month, and customers will have to pay separately for data plans. Consumers can get individual unlimited data and e-mail plans for $30 a month, he says, while enterprise customers can get unlimited data and corporate e-mail for $45 per month.

In addition to touting the iPhone’s new lower price, de la Vega also says that iPhone 2.0 users will benefit significantly from the its newly enabled 3G connectivity, which will allow it to connect to AT&T’s High-Speed Downlink Packet Access network that will deliver users voice and data services. Recently, AT&T upgraded its 3G wireless network to reach downlink speeds of up to 1.7Mbps, a 20% increase over previous top speeds.

The iPhone now supports Wi-Fi, 3G and EDGE networks, and is programmed to switch between them while searching for the fastest possible connection, Apple says. Nationwide, AT&T has about 17,000 Wi-Fi hotspots, and the company currently offers 3G services in 285 markets nationwide. By year-end, the company says it will offer 3G services in 350 U.S. markets.

[Thanks: http://www.networkworld.com]