It would sell like bonkers at $99, but that might be too cheap as stated in the Forbes article below.

 

Come this summer, Apple is expected to dip its toe in the entry level market for its popular iPhone, according to a report by RBC Capital Markets analyst Mike Abramsky.

Apple is expected to debut a $99 iPhone, as well as an iPhone 3G with updated performance, sometime in June or July, according to Abramsky's research note on Tuesday

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http://news.cnet.com/8301-13579_3-10161368-37.html?part=rss&subj=news&tag=2547-1_3-0-20

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The prospect of a hot new product at a great price would seem to be cause for celebration, then. But not in this economy.

 

In a note to investors Tuesday, RBC Capital Markets analyst Mike Abramsky became the latest to predict that Apple will launch an entry-level $99 iPhone in June or July. The result: Abramsky is now penciling in sales of between 20 million and 30 million units in fiscal 2010 for the new device. That would boost Apple's share of the global smart phone market to between 14% and 19%, he writes.

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The problem: With consumer spending declining to its lowest levels since 2002, a cheap phone could damage Apple's sweet iPhone business. "The economics of an entry-level iPhone appear less attractive when factoring in iPhones/iPod cannibalization," Abramsky wrote. "Apple must sell three $99 iPhones to replace gross profit from one 3G iPhone."

 

Abramsky figures the new phone can sell for $99, thanks to a $200 carrier subsidy. However,

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http://www.forbes.com/2009/02/10/apple-iphone-wireless-technology-wireless_0210_iphone.html