Apple Cuts Price of IPhones to Boost Market Share

Apple Cuts Price of IPhones to Boost Market Share

Apple slashed the price of the iPhone 4 and 3GS, a move that may be just as important as the iPhone 4S for future sales.

The Cupertino, Calif.-based company will offer an 8-gigabyte iPhone 4 for $100 and an 8-gigabyte iPhone 3GS for free with a two-year contract alongside the iPhone 4S, which start at $200 with a new contract.

Apple’s iOS platform holds just under 20 percent of the smartphone market in the U.S., while Google’s Android leads with more than 40 percent. Analysts assert the biggest reason for the difference in numbers is due to Apple’s failure to offer its iOS platform on devices that were affordable, and the fact that iPhone was only available on two carriers.

Now, Apple has an iPhone priced for the low-end market in the 3GS, the mid-range market with the iPhone 4 and the high-end with the iPhone 4S. The company has also added Sprint as a carrier in the U.S., which will offer the iPhone 4S and iPhone 4. The 3GS will still only be carried by AT&T.

The price reductions may help Apple even more internationally. Android has dominated emerging markets like China and India with cheap devices, while Apple has failed to capitalize because of the expensive price of its handset. After Apple launches the iPhone 4S, the iPhone will be available in more than 70 countries and less expensive than ever before.

Android still holds a distinct advantage of having dozens of different devices at all different price points scattered across nearly every carrier in the world, but Apple’s new pricing system is a step in that direction.

Apple reportedly held discussions with China Mobile, the country’s biggest cell service provider. If the iPhone maker can strike a deal to bring the iPhone to the carrier at these new, lower prices, the company may make a real run at Google overseas.

Apple’s iPhone 4S may have failed to wow die-hard fans, but the new prices for older devices like the iPhone 4 and 3GS may be the company’s secret weapon.

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