Print 76 comment(s) - last by rdeegvainl.. on Sep 8 at 9:13 AM

Steve Jobs has a change of heart

Yesterday's announcement of the $200 price reduction for the 8GB iPhone was a shock to the system. No one in the industry was expecting it and customers that had already purchased the machine at the $599 price point were fuming mad. To get an idea about how angry some customers were, look no further than this thread at Mac Rumors which is 1500+ posts long.

Steve Jobs got also got an earful with irate customers and his inbox was overloaded with customer complaints about the $200 price cut after only two months on the market.  In an open letter to all iPhone customers, Steve Jobs expressed his "observations and conclusions."

"First, I am sure that we are making the correct decision to lower the price of the 8GB iPhone from $599 to $399, and that now is the right time to do it," said Jobs. "It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone 'tent'. We strongly believe the $399 price will help us do just that this holiday season."

On the flipside, Jobs was also sympathetic to the outrage expressed by existing iPhone owners. “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," Jobs continued.

Jobs noted that more details will be posted next week as Apple and AT&T work out the details of the program.

$100 of in-store credit isn't exactly the same thing as $200 in cold cash, but it's surely better than nothing at all.

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Act First, Think Later
By TomZ on 9/6/2007 4:13:55 PM , Rating: 5
So is this another proof that Apple has adopted the motto of "act first, think later"?

Seriously, why was this an afterthought? Anybody who thought about it should have realized that such an early, steep price drop would annoy iPhone customers.

I applaud Apple's quick remedies, however, it seems like some of their problems are kind of self-induced.

RE: Act First, Think Later
By Quiksel on 9/6/2007 4:24:08 PM , Rating: 2
I hope you get a 6 for that one, TomZ, because you're right about this one (despite my fondness of many things Apple)... They really should have seen this one coming, and it really doesn't make sense to continuously behave this way as a company.

What is sort of sad, though, is that the $100 isn't a rebate or anything, it's a credit to their own store, which in many ways is an easy way to come out looking better than you are... I suppose people will use it for accessories and whatnot, but even still... dang.


RE: Act First, Think Later
By Murst on 9/6/2007 5:00:02 PM , Rating: 2
Its still better than nothing.

I can't think of another time when a company did something like this.

RE: Act First, Think Later
By TomZ on 9/6/07, Rating: 0
RE: Act First, Think Later
By Pirks on 9/6/07, Rating: -1
RE: Act First, Think Later
By TomZ on 9/6/2007 5:57:52 PM , Rating: 1
The comparison between this situation and WinFS makes no sense. WinFS was a product/feature that was cancelled. Apple made a pricing/customer relations mistake. Not even close to similar.

Nice try, save your Microsoft venom for some other thread.

RE: Act First, Think Later
By Pirks on 9/6/07, Rating: -1
RE: Act First, Think Later
By TomZ on 9/6/2007 10:26:38 PM , Rating: 2
Blah, blah, blah. You did realize this article was about Apple, right?

The only response I'll give you is this - you mentioned Russinovich a few times - I'm guessing he doesn't think Windows is too bad, or that Microsoft is too evil. I mean, you know what company he works for, right?

Anyway, get a life. All that hate is bad for you.

RE: Act First, Think Later
By Pirks on 9/7/2007 12:37:00 AM , Rating: 1
I wouldn't even have started posting all this had I NOT known who the heck is Russinovich and who he works for. Anyway, you have to read some more on Windows architecture, start with a) registry and its comparison with other ways to store app config data b) network throttling in vista and why it's done and c) file name restrictions in Vista. Of course you seem to not understand what I'm talking about, since you haven't read about it.

As for the article - yes, I know this is offtopic, but you mentioned other companies and I mentioned about one obvious example of "another company"

Treat it as an example please, there are other companies besides MS doing similar ugly things. I didn't mean that MS is the only one patching and hacking its products instead of doing proper design from scratch. There are others.

And, finally, I never said Windows is too bad. It is bad but yet bearable because people got used to its ugly ways. It is ok by itself, but it starts to look more and more ugly when you compare it to other more modern OSes, Mac OS is an obvious example. To understand why - you have to read up on the OS architecture topics I told you about.

P.S. Also please leave your "MS is too evil" fantasies to yourself. Thank you.

RE: Act First, Think Later
By rdeegvainl on 9/7/2007 1:46:08 AM , Rating: 2
Wow, I can't even begin to describe the diatribe i just read over your last few post, first you complain that your mac buddies rag on you for not getting sp's, then you complain that windows has so many patches. Then you go into some pseudo-cultist rant about Russinvich, swearing people have to read it, over and over. Your starting to sound like a fanatic. If you think other OS's are better, and have better architecture, that's cool and I'm glad you actually have a stated reason behind it (most just use FUD), but the biggest advantage that WINDOWS has is familiarity, with nearly literally all people who use computers. That will also keep them in the lead for many many years to come. I don't believe windows is all that and a bag of chips, (i had to get my own chips) and i am looking into working with Linux for familiarity (would try mac but not enough money) but it seems obvious that throttling at 100mb/s isn't really an issue with 99 percent of those who use machines and the huge mess that is REGISTRY, are inconvenient, but not at all deciding factors on which service to use. The main factor is compatability, with windows you just have more choices, and that is what mac needs to work on, getting people to know what choices they have, and working with developers to make things compatable with mac, sure they already do, but they need to go all out, if they really want to capture the non hate attention of more people, instead of just using elitist mentality.
that is all

RE: Act First, Think Later
By TomZ on 9/7/2007 10:24:20 AM , Rating: 2
Of course you seem to not understand what I'm talking about, since you haven't read about it.

I've been a software engineer writing apps for Windows since about 1990 and device drivers for about the past 10 years, so I'd say I have more than just a passing familiarity with Windows. Prior to that I took several OS courses in college while earning my engineering degrees.

Look, no large software system is going to be perfect, especially one that has evolved over the past 20 years and which has such a strong emphasis on backward compatibility. I agree that Windows has some warts, but so what? When you look at what is important, it works for people - for end users, developers, hardware vendors, etc. That's more important than it being truly perfect and elegant in every way.

MacOS is based on Unix, so I doubt it is without its warts as well.

RE: Act First, Think Later
By mihai on 9/6/2007 5:52:34 PM , Rating: 2
I wouldn’t say a mistake. It was more like gambling and a bit of greed. The hype was so high, they thought people will buy it like fresh bread.

Yet customers were aware of the phone being overpriced - a week from its launch, news came out showing the phone components cost around $250. So I don’t understand why all the grief now, when a more decent price is asked. It’s not like people didn’t know the price premium they were paying. The $100 is really a gift to those who were so eager to have it that they didn't mind being ripped off.

BTW, I wonder if AT&T has something to do with this sharp price drop. I’m sure they were expecting higher sales as well.

RE: Act First, Think Later
By rdeegvainl on 9/7/2007 1:51:09 AM , Rating: 2
It's kind of like the collectors mentality, that it is worth so much because so few people will have it, that when the price drops, they are forced to look at the real value of the item, and get mad that companies made whatever it is more accessible to everyone else. Elitist wanting to pay to be elitist, and complaining when others get a better deal, if you thought the IPHONE was worth 600 dollars and paid for it and were happy, then what did you lose? but most people don't think the IPHONE is worth 600 so they didn't buy it and apple lowered the price. Still such a steep price drop just shows what kind of crap price it had to begin with.

RE: Act First, Think Later
By natehow on 9/6/2007 5:07:11 PM , Rating: 2
its THINK DIFFERENT!!! not think later :) but yeah i despise apple for many reasons this is def one of them

RE: Act First, Think Later
By spluurfg on 9/6/2007 5:11:53 PM , Rating: 4
Seriously, why was this an afterthought? Anybody who thought about it should have realized that such an early, steep price drop would annoy iPhone customers.

Well, not having a price cut would not materially benefit any of the people who purchased the iPhone at $600, unless they intended to resell their iPhone. Sure it's annoying, but Apple has not really taken anything away from its customers.

Second, since when does anybody else out there respond to complaints like this with goodies worth $100? Now that Itunes is DRM-free, it's actually worth something. Canon isn't giving me anything now that they dropped the price on the EOS 30 by a few hundred bucks and introduced a newer model at roughly what I paid.

Honestly, Apple sold its product with a tremendously fat margin because it calculated correctly that it could. Now that the initial period of sales has passed, I think it's smart to have a price cut - at $400 it's still more expensive that pretty much any other phone sold on the market in any meaningful quantity.

Call me cruel but I don't hold much sympathy for people complaining that they feel they overpaid for something that was hyped by all the media as having an unheard of MSRP, and give Apple plenty of credit for actually giving them something valuable to make them feel better.

RE: Act First, Think Later
By TomZ on 9/6/2007 5:20:17 PM , Rating: 2
You're right that price cuts would be expected, but in this case they are too fast and too deep. That is the difference in this case, and why Apple reacted to the negative PR in the way they did.

RE: Act First, Think Later
By Vanilla Thunder on 9/6/2007 5:26:16 PM , Rating: 2
but in this case they are too fast and too deep.

As a consumer, is this even possible? I will NEVER complain about something being too cheap, or the price dropping too fast.

Everybody wants to boo Apple, even when they're trying to put money back in your pockets.


RE: Act First, Think Later
By rsmech on 9/6/2007 5:35:01 PM , Rating: 2
As a consumer, is this even possible?

Not to the new customers, but to your base customers who are loyal you are telling them that for their loyalty they can pay higher prices. A good company usually give discounts to loyal customers or incentives. As for the $100 credit notice that it also states that they could not have received any rebates or discounts originally. So how many do you think this disqualifies? But that doesn't stop good press.

RE: Act First, Think Later
By zinfamous on 9/6/2007 5:31:34 PM , Rating: 3
Call me cruel but I don't hold much sympathy for people complaining that they feel they overpaid for something that was hyped by all the media as having an unheard of MSRP, and give Apple plenty of credit for actually giving them something valuable to make them feel better.

exactly how I feel. If you're the type to bite on an overpriced first-gen piece of tech predicted to have significant growing pains, then why should I care if you feel you got ripped-off 200 bones?

Despite how I feel about Apple, and despite being the RL a-hole that Jobs is notorious for, I hand it to him for responding in such a way. Granted, Apple essentially loses no money over a store credit offer, but it is more than any other CEO has done with such a backlash. A-hole indeed...but a saavy one at that.

RE: Act First, Think Later
By kmmatney on 9/6/2007 6:47:08 PM , Rating: 2
Agreed. People should expect to pay more, even much more, when some hyped product first comes out.

RE: Act First, Think Later
By glitchc on 9/7/2007 11:12:09 AM , Rating: 2
Reducing the price of the product, in your case the EOS 30, after a newer better model comes out makes a lot of sense. After all, there's now a product which has replaced your product as top of the line.

Apple didn't release a corresponding new product for their top of the line, so a drastic price cut is unjustified. Especially so close to its release. Of course this is all a part of doing business and I'm not upset with them in any way for doing it. However, if I did buy the iPhone just to watch its price drop by $200 after 2 months without seeing a new product come out, I'd be a little pissed too. I'm sure the same would hold if Canon reduced the price of your camera two months after you bought it without telling you. In fact, when a department store changes the price of the product within its return policy (30 days), you can price-match your product, that is return it and buy it at a reduced price.

Giving $100 in-store credit is the least Apple could do in this regard.

RE: Act First, Think Later
By ninjit on 9/6/2007 8:23:59 PM , Rating: 2
I really doubt this scenario didn't occur to anyone at Apple - but I'm guess they went ahead anyway, and decided to wait on any wrath-mitigating rebates till after the fact, just to see if they could get away with it:

If there were only a few voices screaming hellfire over buying the iPhone early for $200 more, they wouldn't bother with any kinda refund - and live happily with the extra profit they gleaned in those 2 months.

If there was universal outcry, they implement the credit/refund/rebate program (which I'm sure they had in place as a contingency already), and "save the day" (at least as far as their own asses are concerned).

And in the spirit of full disclosure, I'm not an Apple lover or hater, but I really really like Mac OS X and their laptops (Mac Pro is still a little pricey IMHO); I like the iPhone, but I thought it was too expensive (still is) and missing key features (such as SD memory expansion, GPS, and 3G data). I can appreciate the iPod for what it did to the MP3 market, and the polish it has as a product (same can be said of all of Apple's offerings), but can't see myself buying one anytime soon because I'm still happy with my 6 year old Creative MuVo TX-FM... and well honestly because EVERYONE has an iPod these days, it turns me off a bit too.

Given the polarizing ability of companies like Apple, and the obvious camps of people who post here on the subject: the Apply loyalists (believers) and the Apple haters (the atheists) - I'd like to start a new group:

the Apple-Agnostics!
Our doctrine shall be to approach every new product announcement with mild wonder, but also reasonable skepticism. Avoiding the zealous belief that everything Apple touches automatically (and unquestionably) turns to gold, while simultaneously sidestepping the trap of assuming anything Mac is evil incarnate and simply exists to rob you of your hard-earned money.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference
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