[toadkick]

I don't think that's competing on price first, I think that's a graceful and inexpensive way to increase market share in a very competitive mobile environment. From everything I've read, it's the $0 with contract 3GS that is accomplishing this, and I don't think the people who would get a 2-year old iPhone because it's free are the same kind of people who would spend $800 on a laptop, regardless of the brand. I don't think the drop from $1000 to $800 would really be that compelling to them, because they likely aren't type to care about getting the super-thin awesome hotness with a small hard drive and no optical drive at a significant cost over a run-of-the-mill Dell (or comparable) laptop. The Mac has never had huge market share, and their Mac business brings in a scant amount of profit compared to the iPhone and iPad business, where they can much more afford to lose a small amount of profit in the interest of increasing market share. I don't see why they would kneecap themselves by reducing the price so much just to increase market share, when they make such a nice margin already with what little market share they do have.