Sept. 7 (Bloomberg) -- Sandy Shen, research director at Gartner Inc. in Shanghai, comments on Apple Inc.'s decision to cut prices of its iPhone mobile phones by $200 each and provide a $100 rebate to customers who paid full price for the product.

Cupertino, California-based Apple announced the price cut and rebate the same day it unveiled iPod Touch, a music player with the same 3.5-inch touch screen as the iPhone.

On iPhone sales:

Sales ``have dried up, which is why Apple is cutting the price by so much, and so soon. This of course has the risk of alienating loyal customers, and that is why the company has apologized and offered the rebate.''

On demand for iPhone from business users:

``We don't think it is an enterprise device and Apple never intended it go up to the enterprise users. It is predominantly a consumer and multimedia device.''

``The device cannot be fully managed and secured by the IT department, so this is going to be a serious security threat to the enterprise network. If the IT department decides to support it, it is going to be extraordinarily expensive.''

On demand for iPhone in Asia:

``Because Apple has not launched the iPhone in Asia, there is a window of opportunity for other vendors to come out with copycat phones.''

On iPod Touch's sales:

``They are launching a new device, the iPod Touch, at the same price as the reduced iPhone, and these two devices are going to cannibalize each other for the sales.''

To contact the reporter on this story: Paul Gordon in Hong Kong at pgordon6@bloomberg.net; Mark Lee in Hong Kong at wlee37@bloomberg.net

Last Updated: September 6, 2007 22:51 EDT