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Hot Apple Wrap

Its a big news day for Apple Inc. (Nasdaq: AAPL). The vendor has:
  • Cut prices on its iPhone, while doing away with one of the less popular models;
  • Introduced the first-ever touch-screen iPod music player with WiFi connectivity;
  • Endured intense scrutiny regarding the money it's getting from European sales of its iPhone and related services.

Apple cut the price of its 8-GByte iPhone from $599 to $399 just two months after the phone's introduction at the end of June. And with that, so ends the life of the 4GB iPhone, which just wasn't cutting it with members of the data-hungry mobile mob.

Market traders took the news as a bad sign about the sales of the iPhone, and Apple saw its shares drop $7.40 to $136.76. Just yesterday, Apple's stock rose nearly five bucks on the back of analyst reports that the iPhone was selling well.

Even Apple is not immune to the vicious pricing pressures that dog all vendors in the cellphone business. Consider how quickly rival BlackBerry saw the price drop on its consumer-friendly Pearl phone despite the fact that device has been a big hit for the company.

Apple, meanwhile, has been busy addressing the needs of users who want an iPhone without, er, the phone part. The new touch-screen iPod appears to keep all the major features of the phone except, of course, the cellular service.

The device will sell for $299 for the 8GB version and $399 for a 16GB version. WiFi connectivity in a pure iPod player is also a first for Apple.

In other news, U.K.-based Analysys research firm has revisted questions about what revenues Apple will derive from potential European service provider partners. Regular readers will remember that Unstrung has already reported that Apple received a bounty in the region of $200 from AT&T Inc. (NYSE: T) as well as service revenues. (See iPhone Revenues Flow in Three Streams and AT&T's iPhone Deal Bountiful for Apple.) The analyst firm says that if operators have agreed to a 10 percent revenue share with Apple on all calls and data transfers made on the device it will be a first for the industry. (See Report: Apple Picks Euro iPhone Partners.)

This kind of deal appears to be what the mobile industry needs in order to achieve strong growth in data ARPU (average revenue per user), which is essential, given the ongoing decline in voice, the firm notes. Provided operators continue to open up the mobile Web browsing experience, keep tariffs simple, and maintain control of handset distribution, non-voice ARPU should increase considerably in coming years, from 19 percent of total ARPU today to over 32 percent by 2012, Analysys researchers predict.

— Dan Jones, Site Editor, Unstrung

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