According to market analyst Charlie Wolf of Needham Research, Apple could drop the subsidized price of the 8GB iPhone 3G to $99 and still manage a 42.3% profit margin:
The financial expert estimates that the average, unsubsidized price of an iPhone 3G in the summer was $666 and so would give Apple a nearly 50 percent gross margin on each sale as well as a heavy subsidy from AT&T of $450. Both give Apple a large amount of space to adjust its price and could see the phone maker drop the price of an 8GB iPhone to $99 while still supplying a comfortable 42.3 percent margin...
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