Yesterday Apple announced the latest addition to the iPhone lineup, the iPhone 3G S, which will be offered in two models, 16 GB and 32 GB configurations, priced respectively at $199 and $299. Simultaneously, Apple dropped the price for the existing 16GB iPhone 3G from $299 to $99. This is a heck of  a deal. Given the amount of talk regarding Apple releasing a low priced $99 phone I was wondering if they were going to introduce some sort of bare-bones “shuffle” iPhone. I should have realized that they would simply drop the price on an existing model. Price drops have repeatedly occurred during the iPod’s family history.

The area of the bubbles denotes the storage capacity of the devices. There seems to be three repeated trends here:

1. Maintain existing product lines at lower price points.
2. Introduce new luxury product lines with new features (iPod Video, etc.) at higher-end price points.
3. Introduce new economical product lines with less features (Shuffle) at lower price points.

The iPhone family, although just over two years old, displays similar trends.

I do believe that Apple is being very conservative in their pricing, probably as a result of the economic pressures most consumers are facing. This is clearly indicated by the new prices for an iPhone 3G ($99) and a MacBook Pro ($1,199). Interestingly enough Apple is maintaing the prices for their iTouch family (starting at $229). I believe that these will drop once Apple finally releases the new 10-inch computer tablet that has been catching a lot of press.