Apple to Offer iPhone 3GS for $99?

Morgan Stanley expects Apple to drop the price of the iPhone 3GS to $99 once the new iPhone is released next month, according to Fortune.

Morgan Stanley's Katy Huberty raised her Apple price target to $310 per share saying that investors continue to underestimate iPhone share gains, better-than-expected iPad demand, the growing Chinese market, and increased penetration of the corporate market.

Huberty also raised her estimated 2011 iPhone sales to 61.5 million units based on a survey that showed:

● iPhone customers planning to upgrade rose from 18% in Nov. 2009 to 58% in March 2010. Huberty estimates that the upgrade rate could yield 19 million upgrade units in 2011.
● Huberty expects Apple to cut the price of the iPhone 3GS to $99. She also says if Apple and AT&T could cut monthly service costs to $75 from about $90 today, demand for iPhones would increase by another 7 million units per year.
● 16.8% of Verizon subscribers say they are "very likely" to purchase an iPhone if it becomes available on their network. This could add another 8 million iPhones per year.


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