Is The iPhone 2 Just A Low-End iPhone?

RBC analyst Mark Abramsky said in a note this morning that June will see the debut of the widely talked about $99 iPhone. He thinks while the next generation iPhone 3G will receive minor feature upgrades like a higher-res camera/screen and video chat capabilties, the $99 offering will revert back to the 1st generation iPhone features inlcuding Edge connectivity, low-res screen and no GPS.
What’s the real difference? The price of a data plan. Whether or not a consumer pays $199 or $99, a 2 year contract of an iPhone will end up costing everyone as much as $2400 in connection/data services plans. A lower end iPhone would likely have a data plan of $15/m as a opposed to the current $30 a month rate, lowering the cost of the phone down to an average of $50/m. The monthly plans, not the starting price are what keep most consumers from buying the iPhone, and once lowered see as many as 20-30 million people buy one, increasing Apple’s smartphone marketshare up to 20%.
If you don’t already have an iPhone, would a $99 offering with decreased connectivity and pricing get you to switch over? It wouldn’t for me.

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