At some point down the road a $99 iphone will happen. Whether it is because of reduced materials costs because so many are being produced or because phone companies choose to subsidize it more, it will happen in the next couple years.

Apple has slowly decreased the prices of ipods and iphones and there is no reason to think they will stop any time soon. More iphones also means more applications being sold and this helps Apple make more money with only minimum work on their part.

Exactly when the next price drop will be is impossible to predict. There are too many factors that unless you have inside information are too difficult to speculate on. Will ATT increase the subsidy? Will component costs go down? Will pressure from other cell phone makers force Apple to relinquish some profits to maintain market share?

I would guess we have at least another 12-18 months before we see any reductions.

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