Steve Jobs decided to iPologize to hordes of tinkled iPhone buyers after Apple announced that the price of the must-have telephony appliance was slashed by a third just a couple of months after the initial release.
The apology did come with a consolation prize: a $100 Apple Store credit for each iPhone trailblazer who paid $599 instead of the new $399. (Which is sheer brilliance: “Here! Come into the store, and the first $100 is on us. Our cost was only $20, so it's no real skin off our nose. And if you want to buy more while you're here, well, just go right ahead — you might make us break even or even PROFIT while we apologize and console you and your wallet.”)
I'm glad that Mr. Jobs and company weren't reluctant to slash the price, the way some homebuilders are reluctant to cut the contract price of their growing inventory. Granted, the numbers are a lot bigger with homes, but nothing moves inventory quite like a lower price, and they'll almost certainly have to do it eventually. Can you imagine Ryland's response to this kind of backlash? “We have decided to offer every Ryland homeowner, who purchased a Ryland Home from either Century 21 or Long & Foster, and who is not currently suing Ryland for misinformation at closing or any other reason, a $1,000 credit towards the purchase of any product at a Ryland Homes Store or RylandHomes.com. Details are still being worked out — like what the heck we'd sell in a Ryland Homes Store if we actually had any! — and will be posted on Apple's website next week. Because you've probably visited Apple's site and don't give a rat's behind about ours.”
Anyway, enough about Steve. This was mainly meant to be a public service announcement to any would-be iPhoners teetering on the edge in the wake of this deep price cut. Three-ninety-nine is a substantially better price, but there's a good chance that this price will go down again. Why? Because every electronic device since Creation has gone down in price after the initial frenzy. Twenty-five years ago, a Commodore 64 cost $600. We got one two years later for half that. Now I'd be lucky to get ten bucks for them on eBay. And that's AFTER two decades of inflation! Electronics depreciate just about as fast as anything out there.
This is why I don't get why folks are complaining about the price slash. It was going to happen, and they got to enjoy the extra attention of people crowding around to look at their cool little gizmo for an extra couple of months. Now they've said (or a substantial percentage of them have said) that no, that wasn't quite enough time, you're screwing us by dropping the price so much so soon. And for the people who bought them right before? That does hurt a little bit, I'll admit. But they wanted it, and they decided that they had waited long enough to get it. Each day they waited to buy it was a day that they went without it. If they wanted to own it, they had to buy at some point. They just unknowingly chose a bad time to buy it. But that happens with a lot of things — cars, stocks, real estate, clothes, anything whose price responds to supply and demand.
A friend watched the price of GOOG jump $25/share a couple of days AFTER he sold. He couldn't go back and unsell his shares. At least the folks that bought a $599 iPhone get something out of it.
I think everyone knows the price was bound to drop – most people just didn't expect this much of a drop this fast. I think the $100 credit is a great move on Apple's part. Research shows that people normally spend an amount substantially higher than the gift card or level of credit they have with a store. I bet Apple actually profits from this move.
And you're right, I would expect the phone to be down to around $299-349 by Christmas, if not lower. I also wouldn't be surprised to find out the next version will be released sooner rather than later.
Actually, for those that bought "right before" (in the two weeks leading up to the price drop) they gave a $200 cash refund.
I just don't understand why this was a surprise to people. Unless it is critical that you have a certain piece of equipment, purchasing electronics at the height of demand is a dumb idea.
Hmm. The $100 could get one a shuffle. Or one could sell it for $90/95 cash to someone who was about to make a big purchase there.