$199 iPhone - a real price point for consumers

Finally, with a keynote today, the speculation ended on what would and wouldn't appear in the new iPhone. Lots of press on this topic today, but I'm going to focus on a couple of the highlights for me coming out of the event.

The price point of $199. Wow. A few years ago, only about one-fifth of cell phone owners were willing to pay more than $100 for a cell phone. That percentage has been creeping up year over year. Use of social networks, better browsers and faster network speeds (among other factors) have created an appetite for devices with QWERTY keyboards. Consumers are willing to pay more. Moreover, compared to the prices announced last year, this seems like a bargain. This new price point is a lot more easy to rationalize than the one last year - last year Apple spoke to the notion of phone + portable media player + portable browsing device, etc.

... all of it added up, and it made several hundred dollars seem like a bargain. Consumers didn't "buy" the story. The $199 price point is a real cell phone price that will be attractive to a lot of consumers. Still missing a great camera, but hitting the target on price and making some of it's competitors look expensive.

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