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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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RE: Act First, Think Later
By spluurfg on 9/6/2007 5:11:53 PM , Rating: 4
quote:
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
quote:
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.

Vanilla


RE: Act First, Think Later
By rsmech on 9/6/2007 5:35:01 PM , Rating: 2
quote:
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
quote:
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.


"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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