Apple iPhone price drop
I did not camp overnight to buy one of the first iPhones, but I did get one in late July, and it’s an excellent phone and terrific device. But I do feel slighted that Apple would cut $200 off its price only 6 weeks after I purchased mine, and it’s clear that many other people feel the same way.
The abrupt price 30% cut is a serious public-relations faux-pas, but I think there’s a 50/50 chance that Apple did so on purpose, and will be announcing some special offer or coupon for prior iPhone purchasers so as to raise ire, gain media attention, and then later see gushing praise by the faithful—a masterful stroke of marketing. Certainly it’s not something a company can do very often, but Apple iPhone buyers that are already fawning over Apple and its hip products will sing its praises, making it money well spent for Apple.
I think the stock analysts have it wrong—the iPhone is very attractive at $399 ($599 was too high), and it’s just a short term blip. The point they’re missing is the pissed-off iPhone customers who bought their iPhone(s) in the past 2 weeks—that has the potential to damage Apple’s credibility with new product launches, something far more important for the growth of the company—who wants to be Apple’s latest sucker when a new product is released?
For my part, I’m still unhappy with the AppleTV, a device which continues to warm the interior of my home theater cabinet at the rate of 15 watts 24X7 unless I unplug the damn thing.
Update! Later in the day (after I wrote the above), Steve Jobs responded to this issue, saying among other things:
...Third, even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these.
Therefore, we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T, and who is not receiving a rebate or any other consideration, a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store. Details are still being worked out and will be posted on Apple's website next week. Stay tuned.
Smart guy—$100 (instead of $200) saves Apple $100, but will defuse 95% of the criticism and bring business to the Apple Store (store credit). It was without a doubt the plan to begin with—guys like Steve Jobs love the drama involved—this is the stuff that other marketing-challenged companies can learn from. And meanwhile, Apple keeps $100 X 750,000 from iPhone sales so far. It’s a win/win: $7.5M cash for Apple and great public relations with loads of free press.
