I’d like to throw a few more thoughts into the iPhone price reduction discussion. Scott Moritz isn’t the only one on the web questioning iPhone sales numbers after today’s price drop.
John Gruber rightfully labels Moritz as “Jackass of the Week,” but I think even Gruber’s strong analysis is overlooking something.
While certain component costs are surely reduced thanks to part sharing with the iPod touch, I doubt this would justify the $200 price plummet.
The iPod touch is the still key, though. an 8GB iPod touch retails for $299. It features every slick element of the iPhone, namely the great music and web browsing interfaces, but simply omits the phone, camera and related software.
(I see an application like Maps as more phone-related than anything else. And don’t forget, thanks to Safari on the iPod touch, other maps can be accessed via WiFi when needed.)
The iPhone has sold well at $599 because to get all those flashy features, it was the only package available.
So now ask yourself, “How much is a cameraphone worth?”
If the answer doesn’t match the $300 difference between an 8GB iPod touch and an 8GB iPhone with previous pricing, then you’ve just figured out why the iPhone price had to drop today.