Apple to introduce lower-priced iPhone

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Apple will announce a cheaper edition of the iPhone as soon as Monday, the opening day of its annual Worldwide Developers Conference. Citing sources familiar with the initiative, Financial Times reports Apple will introduce an iPhone priced at either $99 or $149, down from the current low end of $199--operator partner AT&T will continue to subsidize the smartphone when subscribers sign a two-year service contract. "It's either a $50 or a $100 cut," said Morgan Stanley analyst Kathryn Huberty, citing a firm consumer survey indicating that a $50 reduction could increase iPhone demand by 50 percent and a $100 cut could increase demand by 100 percent. Apple declined comment.

Financial Times notes the lower-priced iPhone will likely begin production in July and boast the iPhone 3.0 operating system update, also expected to be released next week at WWDC 2009. Collins Stewart analyst Ashok Kumar said he expects AT&T will introduce new iPhone data pricing plans in the third quarter--AT&T CEO Randall Stephenson said last week that variable mobile data pricing would arrive eventually, with heavy data users charged more and infrequent users less.

In related Apple news, The Wall Street Journal reports that CEO Steve Jobs will return to his post this month. Jobs went on medical leave in January, citing a nutritional problem related to a hormone imbalance. "He was one real sick guy," a source said. "Fundamentally he was starving to death over a nine-month period. He couldn't digest protein. [But] he took corrective action."

For more on the reduced-price iPhone:
- read this Financial Times report

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