Apple's Chief Operating Officer Tim Cook has startled the world by saying that it is time that the iPhone was made cheaper. We know that Steve Jobs is off sick at the moment, but this sort of statement is probably an indication that he is not coming back. (That's just low. sub.ed.)
Cook said that Apple is developing "lower-priced offerings" for the iPhone because the company doesn't want its products to be "just for the rich." But that is the whole point of the iPhone. It proved that the very rich could be very dumb and give away their cash for nothing.
If Apple goes down the cheap and cheerful route it's image as the Rolls Royce of technology will be forever tarnished. It could mean that people who actually know something about technology might actually buy one because it is good value, and then where would Apple be.
Actually Apple has has a huge profit margin on its goods so if Cook wanted to drop the price he would have no problem in doing so. However it is more likely that the cut price iPhone would either lose a lot of its technology or its higher priced models will have to gain a lot more.