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iPhone Price-cut Controversy for the wrong Reasons

Sep 7 2007, 6:00am CDT | by , in News | Mobile Phones

iPhone Price-cut Controversy for the wrong Reasons
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After Steve Jobs announced on September 5th that Apple is lowering the price of the 8GB iPhone from $599 to $399 many early iPhone buyers apparently whined a lot and now Apple is giving you a pacifier so you can stop crying.

In an open letter Steve Jobs announced yesterday that Apple offers every iPhone customer a $100 store credit. Are you happy now?
You should not be, you should have cried very loud and not bought the iPhone at launch. Why? Because Apple made you pay $599 for a phone with a 2 year carrier contract (let's not talk about the unlock hacks and failed credit check options). $599 should have been the price for an unlocked iPhone. This price is in the range of other advanced unlocked smartphones. But Apple made you commit yourself into a 2 year AT&T contract. Oddly nobody screamed back then, but now when Apple cuts the price of the iPhone they do.

The new $399 price is closer to what the price of the locked iPhone should have been from the start. Apple should actually drop it another $100 in November to directly compete with the Blackberries and Treos on price.

I agree with Mr. Jobs that the technology and early adopter road is bumpy. If you buy an LCD HDTV, you can be sure that it will be way cheaper in some store a week later. You might not even have bought it at the best price possible in the first place.
With Apple's strict pricing policy it is of course more obvious when the price is lowered.

To you Wall Street types: What were you thinking? Apple shares dropped 5% after the announcement of new iPods and the price-cut. Did you really thing Apple would sell 10 million iPhones at $599 a pop in the first year? At that price you get the early adopters and that is it. To reach 10 million customers Apple needs to tap into the advanced consumer who is not blind to the price of a product.
I wonder what would happen if the rumor is true and Europe is getting a 3G iPhone with 16GB this fall, just a couple of months after you dropped $599 on a 'lame' GSM iPhone.

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