Dave Gonigam

One of the hazards of blogging is something I experienced practicing daily journalism: The need to "feed the beast" pretty well assures that the level of quality will not be a rock-solid consistent affair.  With that in mind, allow me to correct my casual and ill-considered remark yesterday that the iPhone Index is, against all odds, looking up.

Believe me, it hurts to realize I misread an anecdotal economic indicator of my own invention, thinking that somehow Apple was bucking a poor economy.  But that's exactly what I did in my Monday morning wrap-up, basing my claim on a BBC article that, in retrospect, might well have been a paraphrase of an Apple press release.  Yes, iPhones now make up 20% of the U.S. smartphone market.  But in my rush to "feed the beast," I did not pause to consider if the smartphone market isn't as big as perhaps I thought.  How many Blackberries and Treos are actually floating around out there?

The answer — and the realization that the iPhone Index is just as sickly as it's ever been — hit me as I read the Financial Times account of Steve Jobs's latest dog-and-pony show for software developers and the tech media.

Apple is again slashing the price: An 8GB model that was $399 will now be $199 — and it will operate on the faster 3G networks that techies say it should have all along.  In addition, Apple is giving up on its scheme in which it collects a portion of wireless carriers' monthly fees for data services.  Now the carriers can keep those fees, and in exchange, they'll subsidize the cost of the handset, as they do with most other phones out there.  That's how Apple can manage to cut the price of an 8GB model from $599 at introduction a year ago to $199 now.   According to the FT:

Steve Jobs, chief executive of Apple, conceded that the iPhone needed to be “more affordable” to reach a wider audience. He said Apple had sold 6m of the phones since they went on sale at the end of last June, implying that sales had reached little more than 2m so far this year. A long way short of the 10m target he had set for 2008.


In the future, I'll think twice before doubting my own long-standing theories.

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

Recent Articles

5 Min. Forecast
Bold Predictions from the Bubble Crowd

Dave Gonigam

Even if tech giants like Facebook and Apple have a down day now and then, that doesn't mean they aren't still sound companies with upside potential. Of course, some people aren't convinced... which is why the word "bubble" has now reentered the conversation. Dave Gonigam has the full story...

The Price Floor That’s Key to Gold Mining Profits

Matt Insley

Gold has had a rough go of it since the 2008 financial crisis. But according to Matt Insley, there is now a very clear price floor for the yellow metal. And what's more interesting, he comes to this conclusion by way of a glass of chocolate milk and Janet Yellen's actions from here throne at the Eccles Building. Read on...

Why You Should Tune-Out the Talk of a Tech Bubble

Paul Mampilly

The recent spate of new tech-based IPOs has a few prominent investors (Ahem... David Einhorn) touting the return of the '90s tech bubble. But there are some very good reasons why this market is nothing like the '90s, and why investors should be wary of any advice to the contrary. Paul Mampilly explains...

The Scariest Thing You Don’t Know About Generic Drugs

David Eifrig

Generic drugs are supposed to lower healthcare costs and provide you with another medical alternative. That's what it says on paper. But there's a real danger that goes along with these drugs. A danger even your doctor might not be aware of... Dr. David Eifrig has the full story. Read on...

An Unlikely Source of Dirt-Cheap Energy

Greg Guenthner

The solar panel turns 60 on Friday, but this birthday celebration will be unlike any other the industry has seen so far. In the past, solar energy's high price tag meant its wide-spread usage was nothing more than a pipe dream. But now, after six decades, solar power may finally be cheaper than oil and Asian liquefied-natural-gas. Greg Guenthner has more...