There have been various reports posted in blogs recently hinting at an impending price drop regarding the iPhone.

     MacWorld reprinted this article from the BizFeed blog at PC World’s Business Centre.

     There’s no shortage of buzz over predictions that iPhone service costs are about to drop, but I wish to respectfully disagree with that expectation. The predicted price drop is supposed to be the result of a trickle-down effect from the heating up of competition for cellular customers. Fortune.com quotes Kaufman Bros’ analyst Shaw Wu as saying “cheaper all-you-can-eat pricing from Sprint and T-Mobile could convince AT&T to reduce it’s up-through-the-sky pricing for iPhone users.

      From Wu’s lips to God’s ears, but i am not particularly hopeful. Apple, which plays a key role in determining AT&T’s pricing for iPhones and service, has never been known to reduce prices except as a normal part of the technology cycle.

      As long as the iPhone is considered the prominent handset, Apple and AT&T will do very little in the way of price reductions, especially on the monthly service. Wu is correct in noting that the service pricing is a reason some people don’t purchase an iPhone, but the large price reduction necessary to offset that simply isn’t in Apple’s bag o’ tricks.

      I’d be happy if 3G service just wasn’t more expensive than what i pay for the original iPhone’s EDGE data service. Moving from my old iPhone to the3G model would add $30 or even $40 more per month to my bill. Plus the cost of the new handset.

     Sprint and T-Mobile are cutting prices because they don’t have interesting handsets to sell. And price-sensitive consumers will probably find that acceptable.

      Yes, the price of the iPhone and AT&T’s service for it will eventually come down, but i don’t expect it to happen quickly or in a major way. Though, I’d love to be wrong on this one – and get to upgrade my iPhone at a price I’d be willing to pay.

     The recent tactics used by BestBuy adds fuel to the rumoured reductions aswell as reports indicating that reductions in the prices for DSL and Broadband, which have fallen dramatically in the past 3-4 years, have led to an increase of custom, which is hardly surprising.