Apple is just waking up to the fact that its iPhone might be priced out of the market. According to SF Gate, Apple is considering its $500 and $600 price tags and is looking at the possibility of offering rebates.

Shaw Wu of American Technology Research thinks that the price will probably be around $350 to $550 mark, depending on the version.

Apple is apparently waking up to the fact that its iPhone is being put into a more cut-throat market where an Apple badge does not mean people will automatically pay over the odds for the product.

Wu thinks that Apple wanted to keep the price high so that the phone did not kill off its iPod cash cow. Now he thinks that Apple will drop the price if they can get some kind of "bounty" or a revenue sharing agreement with AT&T for each customer.

Most industry executives think that if Apple was sensible, it would drop the price to about $250, which is what similar phones are being sold for. Then the name would count for something.

More here.