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Wolf calculated that falling component prices and a rise in the level of royalties from network operators as users pay more to use the devices network features such as Internet access will reduce the price of the smartphone-iPod hybrid to just $76 by 2016. The phone has a projected launch price of $599 for the 8GB model.

'The decline in price should accelerate demand as the iPhone invades the sweet spot of the mobile phone market,' he wrote in a note to investors.

Wolf predicts that by 2016 Apple will have around seven per cent of the phone market, compared to its initial projection of just one per cent, adding $20 to the company's share price.

A breakdown of component costs by research firm iSuppli has suggested that Apple already has considerable scope for price cuts. The analysis estimated that Apple will enjoy a 50 per cent profit margin on each phone sold, but has been widely criticised for failing to factor in other costs, such as marketing, distribution and R&D.

Furthermore, DisplaySearch, a firm that conducts research into flat panel technologies, has questioned the component costs on which iSuppli based its calculations. Specifically it believes that the 3.5in 320x480 touchscreen could cost twice as much as iSuppli claimed, as it appears to use custom rather than off-the-shelf technology. It cites the narrow bezel around the display and the fact that the touch technology may dictate the use of thinner glass than would be used on a standard mobile display.

Notebook Market Research also

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calculated that the component would be much higher than iSuppli's estimate of $229.85 and closer to $300.

'After the costs associated with building, shipping, marketing and selling the iPhone are included, we expect that margins will be closer to Apples typical mid to high 20 percent range,' said John Jacobs, Notebook Market Research director.

While Apple announced when it unveiled the phone earlier this month that the first units would ship in the US in June, AppleInsider claims that 'chatter through the grapevine' hints at an earlier release.

'While initial word that the iPhone's ship date may have been overly conservative came from a number of unproven sources, most citing information inside Cingular, more reliable sources with proven track records have come forward to confirm that there remains a very real possibility that the iPhone will ship earlier in the second quarter,' the website says.

That could mean a shipping date sometime in April it claims.

AppleInsider also reports rumours of a new iPod release as early as next Tuesday.

'Specifically, those people say the announcement will add a new colour (or edition) of an existing iPod,' it says. 'Neither the particular colour or iPod model were readily available.'

Possible variations include a pink or red version of the fifth generation iPod (in times for Valentines' Day) or a (PRODUCT) RED version of the iPod shuffle, but AppleInsider believes that a 2GB version of the (PRODUCT) RED nano is most likely.

The other possibility is a new special edition model, to sit alongside the U2-branded player. There has been some speculation that this may be a Beatles model to coincide with the band's predicted digital downloads debut on iTunes.