Worry Over Sales Spurs Talk of Cheaper iPhones

Apple is having to decide wether to keep the iPhones at higher prices with lower sales or lowering the prices to compete with smaller phone labels.

Laurence I. Balter, an analyst at Oracle Investment Research, said one reason Apple’s stock had been hurting was that analysts often overshoot with their predictions for how many devices Apple will sell each quarter. He said that might explain some of Monday’s sharp drop: “Everybody got a little too aggressive and optimistic.”

Mr. Balter said he thought Apple’s strategy for growth would be to go after more price-conscious consumers, because once they become customers, they are likely to keep buying other Apple products. Perhaps the key to that strategy will be a cheaper iPhone, he said.