iPhone Pro Update

For those skeptics out there who doubt that Apple will launch an iPhone Pro sometime between October 2008 and January 2009 at Macworld, check out this BusinessWeek article. The synopsis is that the iPhone 3G is $53/unit cheaper to manufacture than the original iPhone according to analysts. This puts the cost to produce the iPhone 3G at $173 versus $226 for the original iPhone, and they go further to predict that iPhone 3G costs will fall to $148 in 2009. They go further to estimate that Apple is selling the iPhone 3G to Apple for $499, leaving Apple a huge $281 profit per unit (or about 56%).

This means there is plenty of room for Apple to drop the price of the iPhone 3G to AT&T when they are ready to launch the iPhone Pro, in order to support AT&T dropping the iPhone 3G 8GB to $99, $49 or even free.

Now that Apple has embraced the subsidy model and launched the AppStore, they have a lot to gain by getting to a free phone as soon as possible to boost their volume and increase their chance of winning the mobile application platform battle. Even if Apple doesn't win this battle and only continues on their current desktop/laptop share accumulation trajectory they stand to make big money through increased desktop and laptop sales.

Microsoft has good reason to be obsessed with Apple...