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AT&T Dumping 8GB Refurb iPhones for $99, Making Way for 32GB Model?

AT&T has decided to start offering 8GB refurbished iPhones for $99. The rather unexpected move raises notions that a 32GB iPhone may be offered at the upcoming Macworld Expo.

stock1 MacBlogz has previously received an unconfirmed tip pointing to the release of a 32GB iPhone at the upcoming Macworld conference in January. “That rumored red iPhone… It’s not happening. The only iPhone news I know for certain is that it’s getting bumped to 32GB in January,” the tipster explained.

AT&T’s move to start offering refurbished 8GB iPhones falls in line with previous speculation about Apple diversifying its iPhone family.

In order to sell a less-expensive iPhone, priced (let’s say) at $99, Apple would need to introduce a new model with less storage. The current models would get bumped in specs, and a cheaper iPhone would be introduced and outfitted with less storage than its bigger brothers. The current 8GB iPhone would have absolutely no place in this line up, and will probably be discontinued. At the same time, for Apple to increase or double the iPhone’s storage, they would need to either raise the price, or increase the iPod touch’s storage capacity as well, in order to avoid significant cannibalization, or confusion among consumers.

Theoretically, the iPhone family would have a diverse selection of products, just like the current iPod line-up. Perhaps not as many models or choices in color, but the storage capacity and features will be spread across the products, lowest to highest, priced accordingly. In what initially might seem to conflict, Friedman Billings Ramsey analyst Craig Berger has reported today that “Apple has cut its calendar Q4 iPhone production plans significantly more than originally estimated.” Chances are Apple is cutting production (on current iPhone models) to level out with industry demand. Although extremely difficult, the company must have the ability to foresee downturns in the industry, and mobile market.

Apple has announced that this is their last year at the Macworld expo, and that CEO Steve Jobs will not be giving the keynote speech. Instead, Senior VP of Worldwide Product Marketing, Phill Schiller, will be delivering the speech. While the unconfirmed tip remains from an anonymous source, a relatively standard storage boost may entirely be something that Schiller announces at Macworld. The news may be seen as a standard storage boost, and not something Jobs is needed for to unveil.

The price drop, if even for a refurbished iPhone, is still substantial. A recent report covering Apple and AT&T’s future outlook on distribution may shed some light on the aggressive pricing we’re seeing from all angles. In addition to the new refurbs offered by AT&T, Walmart is selling the iPhone with a standard rollback discount of $2, and Best Buy is offering up new models with solid $10 discounts through December 31st.

Comments [6]

6 Comments to “AT&T Dumping 8GB Refurb iPhones for $99, Making Way for 32GB Model?”

jojo22 @ December 26th, 2008 at 3:06 pm
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Makes sense to me. It honestly does.

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larry c. @ December 26th, 2008 at 3:12 pm
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I think this is MUCH more plausible than this iPhone nano I keep hearing about.

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uS @ December 26th, 2008 at 3:35 pm
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the unconfirmed tip just adds fuel to the fire

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oodles @ December 26th, 2008 at 4:28 pm
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Does anyone else realize that this makes perfect sense? They don’t need Jobs to unveil a simple storage bump to the iPhone, it’s not a new product and it’s a natural progression in storage increases. Jobs isn’t needed.

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Ryan @ December 26th, 2008 at 8:19 pm
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I wouldn’t bet against it.

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Matt @ December 26th, 2008 at 9:23 pm
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I’ll admit that I rarely have my 8 GB model completed filled up, but my buddy bought the 4 GB model when Apple was closing them out last year, and it’s not really enough space. By the time you account for formatting and the operating system, you’ve got very little room for apps, music, and especially videos.

The real question is how much longer before the 8 GB model can cost $99. Video takes up so much space, especially TV episodes and movies from the iTunes Store. If you’re going to put your own DVDs on the iPhone, you can optimize the size for the iPhone (which is smaller than Apple’s, which is optimized for the Mac/Apple TV). I wrote a post at Mac Guru Lounge covering how to do this.

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