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Print 38 comment(s) - last by kthhrrsn.. on Sep 17 at 10:36 AM

Apple's $100 store credit offer for iPhone buyers goes live

When Apple announced that it cut the price of the iPhone by $200 to $399, there were many irate customers yelling at their computer screens. The only people that seemed to be happy regarding the news were the people who wanted an iPhone, but were turned off by the $600 price tag and those that wanted to rub salt in the wounds of the early adopters.

Steve Jobs received tons of angry emails from customers and decided to offer customers $100 of store credit if their iPhone purchase was made outside of the 14-day sale period.

"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," said Jobs on September 6.

Jobs said that more details would be revealed the following week and he stuck to his word.

iPhone customers will first be required to go to Apple's website and enter in their iPhone serial number and phone number. After that time, an SMS text message will be sent to the phone with an access code to redeem the $100 credit. The access code can then be used in combination with your phone number to generate an electronic store credit of $100 to use towards any Apple Store purchase.

Customers must request the credit before November 30, 2007 or forfeit their rights to the $100.





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Horrible
By Spivonious on 9/14/2007 1:02:10 PM , Rating: 2
So in exchange for spending $200 too much, they get to buy $100 more of Apple stuff? If I was one of the early adopters I'd much rather receive $100 cash.




RE: Horrible
By retrospooty on 9/14/2007 1:09:37 PM , Rating: 5
Sure, but early adopters shouldn't have much to say (although they do) Its not like everybody and their mother didn't know it was WAY overpriced. If someone agrees to buy something at a rediculous price, they are lucky to get anything back. Its not like Apple put a gun to anyone's head and made them but it.

If I offer to sell someone my car for $50,000- (it has an appx $10,000 KBB value) and they agree there is no harm done, just buyer beware.


RE: Horrible
By Hare on 9/14/2007 1:33:39 PM , Rating: 5
Exactly. I was surprised that Apple even offered any "compensation". I've bought tons of stuff that cost an arm and a leg and after a few weeks the price was down 25%. So what? I won't cry because a company lowers prices. I think this is ridiculous.

Obviously the buyers thought that the product offered value more than the original price or otherwise they wouldn't have bought the thing. It's rare that people are crying because a company lowers prices. Suck it up. Everyone knew that the prices would go down once the buzz was over. Happens with every product.


RE: Horrible
By Behlal on 9/14/07, Rating: -1
RE: Horrible
By retrospooty on 9/14/2007 1:46:26 PM , Rating: 2
ugh... you way overcomplicated it. My point was that if the seller sets a price and the buyer agrees there is no foul done, unless the seller is not honest with the product. We all knew the specs and capabilities and if someone paid $600 for it that is on them to justify.

A person cant complain about buying an overpriced $600 phone just because they dropped the price later. At some point they decided it was worth %600 to them. That fact didnt change.

that and... duh. All phones and smartphones drop in price regularly.


RE: Horrible
By xphile on 9/14/2007 11:52:50 PM , Rating: 2
No, he WAY WAY overcomplicated it.

He needed to say the bit where he went:

"Consumers had a reasonable expectation..."

And then just add...

"that this is the most hyped new Apple product in history and if you buy it on day one you are effectively bending over and pleading "Please, please Steve, take me now".


RE: Horrible
By Bioniccrackmonk on 9/14/2007 2:05:02 PM , Rating: 4
quote:
In the case of the iPhone, the only price for it was $600. Consumers had a reasonable expectation that the cost of the iPhone was primarily based on the cost of the components plus a sensible profit margin for Apple


Dated uly 5 2007, Each 8GB iPhone Costs $265 to Make, Says Tear-down Report: http://www.dailytech.com/article.aspx?newsid=7939

That is one sensible profit margin then, sounds like everyone who bought one early either didn't do their research and believed it was a reasonable cost or just didn't care about the price and wanted one. Either way though, both of these types of consumers don't deserve crap in return and should be thankful Apple is willing to give them $100 because so many cried.

Gullability and ignorance is no excuse to cry foul.


RE: Horrible
By retrospooty on 9/14/2007 3:12:08 PM , Rating: 2
agreed.

" Consumers had a reasonable expectation that the cost of the iPhone was primarily based on the cost of the components plus a sensible profit margin for Apple "

Consumers have nothing to do with that. Companies build their products as cheaply as they can and sell it for as much as people are willing to buy it for. Thats all Apple did.


RE: Horrible
By Chaser on 9/16/2007 1:20:58 AM , Rating: 1
They have the "right" in this fine country to complain all they like. But no one forced them to pay the listed price. I can agree with their frustration but not their expectations.

As far as "how much they can get them to pay" thats the name of the game in a capitalistic economy right? Since you seem up on U.S. values there's another one that I'm sure you "so" know.

Cheers


RE: Horrible
By kthhrrsn on 9/17/2007 10:36:27 AM , Rating: 1
Huh? Car analogy...phone analogy...what's the difference? New items ALWSYS cost more. Because early adopters are WILLING to pay more to have it first! Prices MUST come down before being widely accepted by the mainstream. And who told you that consumers had a "reasonable expectation" that the iPhone's original price was based on cost + a "sensible" profit margin? Everyone knew that the iPhone, at 600 bucks, was ridiculous priced, but it had the COOL FACTOR going for it. People were WILLING TO PAY to be COOL. The Razr cost $500 when it came out. Now, you can ge them for free!!

Consumers do have a right to complain. As you've pointed out, it's a free country! But I don't sempathize with them. EVERYONE WHO BOUGHT AN IPHONE AT $600 KNEW THAT THE PRICE WOULD COME DOWN. They just didn't expect it to happen so quickly, so now they're mad for not waiting. They should be mad at themselves! If the $200 difference is a big deal, you probably shouldn't have splurged!

If a car with all new technology comes out at $50K then the price drops to $10K overtime, what's the difference?? Same analogy.


RE: Horrible
By A5un on 9/14/2007 1:52:23 PM , Rating: 3
It's just Apple making sure these suckers will keep buying crap from Apple. Even these people may feel cheated sometimes.


RE: Horrible
By Etsp on 9/14/2007 1:48:10 PM , Rating: 2
Ironically... the new Sony Video Walkmans received a price-cut as well, although admittedly a lesser one. The price for the top end 8gB one dropped about $30. This was less than two weeks after they launched in the US. How did I find out about it? Sony sent me an email saying that I would be credited that amount in the next few days. Next day I got an email saying that I will be credited $31.88. This credit is going to my credit card, not their Sony store.

So I am left with this shocking result... Sony actually did something that I am quite happy about, without my intervention!


RE: Horrible
By Gul Westfale on 9/14/2007 2:06:05 PM , Rating: 1
i agree with the original poster.

also, i think the fact that apple was able to cut the price by 200 bucks so quickly show you that they had no confidence in the success of the iphone, otherwise tey wouldn't have priced it with a 200 dollar profit margin at first. so i guess even they realise this thing sucks...


RE: Horrible
By mikeyD95125 on 9/15/2007 3:21:35 AM , Rating: 2
I totally disagree. When they released the iphone at $600 it catered to the people who would run out and buy it "because it is cool" and to all the people who just love apple products. Now they dropped the price to $400 to cater to an even larger market to sell more phones. Notice how people were ok with a $400 XBOX360 but people thought a $600 PS3 was outrageous? Sometime in the future they will probably drop the price even further to cater to an even larger market. Maybe something like $300 for 8GB/$400 for a future 16GB model.

And why does the iPhone suck? My friend just got a 4GB model for free, and I really like it. The speakers are excellent and the screen is F****** beautiful. It has a lot of cool features and there is Wi-Fi all over silicon valley so you don't have to use the slow connection that often. And i'm a person who usually rips on Apple but this is a good product. Most people who say the iPhone sucks seem to have never even touched one.
Sure the hype was annoying but it really is a great gadget if you can afford it and are willing to use a sub-par network (I have used T-mobile and AT&T and they both blew)


RE: Horrible
By retrospooty on 9/15/2007 2:07:22 PM , Rating: 1
Yup... I agree.

I think of it like this. Apple sold appx 750,000 at this high price point. Now they lowered it to what it should have been released at, not counting on the fanboys and gadget whores with money to burn. 750,000 x $200 each = an extra $150 million dollars pure profit on early adopters.


Not a fan of this offer
By JasonMick (blog) on 9/14/2007 1:07:51 PM , Rating: 3
While I think the price cut is a good thing, particularly for Apple, I am not a fan of this offer.

In particular, I have always been against stores and businesses offering "store credit" refunds for customers money, because it is attempt to "trap" the customers business in store--a move sure to turn off the customer.

Really, I think that Apple should not have caved and offered a refund. As one person pointed out, the MotoRazr was around 500-600 when it first came out, and now it is nearly free during sales. To my knowledge Motorola did not refund early adopters...thats the price you pay for bleeding edge cell phone technology.

Now, if Apple had to go and offer this refund, they should have just offered 100 cash refund. I think at the end of the day Apple would get much more business if they had done this, than there current move.




RE: Not a fan of this offer
By Locutus465 on 9/14/2007 1:16:26 PM , Rating: 2
Ah.... But a $100 cash refund would be very bad for Apple's bottom line... Reason being they will (obviously) actually be losing $100 per phone sold. If they offer you $100 store credit, chances are you're going to buy something that retails for $100 or so, but in reality really doesn't cost apple much of anything at all! Thanks the real reason for store credit and why it's offered so often to angry customers.... It's effectivly a placebo, the customer feels justified, and the retailer really doesn't get all that hurt.

Learned all about that durring my just after college time spent at Radio Shack :)


RE: Not a fan of this offer
By Master Kenobi (blog) on 9/14/2007 1:31:57 PM , Rating: 1
Indeed, I did some time with the Best Buy Geek Squad a few years back and we did the same thing. With the insane markups on most accessories (The likely item to be purchased with instore credit) it wasnt an issue. Things like the $30 USB cable really only cost us about 1.35, so the customer burned $30 store credit, we only took the 1.35 hit which was easily made up by selling the same accessory that same day to a regular customer. Ah the joys of retail marketing, your still getting screwed even if you don't know it.

FYI... I don't shop at best buy out of principle, the shit they do is just over the top. I know it, I worked there, I saw us do it lol.


RE: Not a fan of this offer
By AlphaVirus on 9/14/2007 1:39:12 PM , Rating: 2
You also have to remember a markup is not only on accessories but major products as well (ie the iphone). I am sure they made a large margin on that product alone and the $100 rebate they are offering is merely a portion of the markup. Also think about the process needed for people to get the $100 rebate.
1. Go to apple.com which gives the site more hits which = more revenue
2. Receive sms messege, do this, do that, bla bla bla

How many steps does it take? Too many for alot of people and they will end up being either too lazy or get confused about the whole thing.
What about the parent who just bought the product for their child and never hears about the rebate, or the business man who does not care about the $100.
Apple all-in-all will not even be giving out money to the ALL 500,000+ early adopters, maybe half will actually take advantage of it. And they might just be getting products Apple has overstocked and are just trying to get rid of ala PS3 style


RE: Not a fan of this offer
By Locutus465 on 9/14/2007 2:08:10 PM , Rating: 2
I can't speak for Best Buy, but I can tell you that it was quite frequent that we made no profit (or more often than you think lost money) selling TVs, computers, gaming systems etc.... The only reason why Radio Shack sold that kind of stuff was to get you buying PBA (Parts, Batteries and Accessories). Which would be the *real* reason why they ask you if you need batteries/hookup cables when buying a shiny new HD TV with HD-DVD/Blueray player... Because if you don't buy any they're going to lose out on the sale!


RE: Not a fan of this offer
By TomZ on 9/14/2007 5:50:05 PM , Rating: 2
When I worked at RS in the early 1990's, it didn't work this way. They earned margin pretty much across all products except for door-busters and clearance items. Sure, "PBA" had higher margins, but they were also making decent margins on big-ticket items.


RE: Not a fan of this offer
By Locutus465 on 9/15/2007 12:55:38 AM , Rating: 2
Hmmm, things must really have changed by the time I was there in '02... For instance I can tell you right now our stores margines were negitive for laptop computers (i.e. we lost selling laptops), TV's weren't great either, DVD players were nothing to jump up and down about (and your comission on these product reflected this). If you wanted to make money you pushed PBA, cell phones and satallite TV.


RE: Not a fan of this offer
By Spotacus on 9/14/2007 1:43:41 PM , Rating: 2
How quickly did the price of the Razr fall though? Was it 300-400 after two months? At this point, it has been out for at least 2 years. It isn't ridiculous that Apple dropped the price of the iPhone. It was just that it was so much so fast. If it had been six months instead of two or a smaller price decrease, no one would have cared.

Yeah, early adopters get screwed over on price, we all know that. But generally they don't get screwed this much. And I usually don't care if someone wastes their money to get an "it" item.


RE: Not a fan of this offer
By Etsp on 9/14/2007 3:03:06 PM , Rating: 2
quote:
Yeah, early adopters get screwed over on price

You meant to say, "Yeah, Apple customers get screwed over on price." Right?


RE: Not a fan of this offer
By TomZ on 9/14/2007 5:52:45 PM , Rating: 2
I doubt the price of the RAZR fell that fast, but more importantly, the price drops were not widely publicized. Apple needs to remember that the mass media is obsessed with making news of every move Apple makes (esp. on iPhone), and therefore somthing like a price drop is going to be amplified pretty loudly. I guess that's one of the drawbacks of so much free PR.


RE: Not a fan of this offer
By ciparis on 9/14/2007 11:36:51 PM , Rating: 2
If this was a Microsoft "credit", I might have more of a problem with it. But I have no doubt that I can find $100 worth of something that I would like to own in the Apple store. It may not be cash, but it's far, far from worthless. Consider it "geek cash" :)


RE: Not a fan of this offer
By Omega215D on 9/15/2007 12:05:45 AM , Rating: 2
Like a pair of Shure SE 110 to make the iPod sound as good as the others. ;)


No More Apple News Please!
By TomZ on 9/14/2007 2:16:55 PM , Rating: 2
I'm sure I'm not the only one who is tiring of news items getting posted each and every time Apple does the smallest most miniscule thing. Please no more Apple news for a while. I'm getting burned out! Let's take the rest of September off, ok?




RE: No More Apple News Please!
By Gul Westfale on 9/14/2007 2:19:31 PM , Rating: 3
:)

apple is the paris hilton of the tech world, she thinks she's stylish and pretty and has a brain but she's just a braindead bimbo who looks like she grew up in a trailer park... so yeah, i second that motion, no more apple news please :)


RE: No More Apple News Please!
By TomZ on 9/14/2007 2:49:00 PM , Rating: 2
quote:
apple is the paris hilton of the tech world

I love the analogy - so true!


RE: No More Apple News Please!
By bunga28 on 9/14/2007 3:06:31 PM , Rating: 2
pardon me, but I think there are people who live in the trailer parks are very respectable.


RE: No More Apple News Please!
By Phynaz on 9/14/2007 2:48:32 PM , Rating: 2
Apple news = hits from all the Apple haters = ad money.

Not going to happen.


Its fair market price...
By littleprince on 9/14/2007 2:21:19 PM , Rating: 2
Its supply and demand.

Doesn't matter what the cost to manufacture is.

People were willing to pay, that was in there minds a "fair" price. Now that the price has dropped, that's there problem.

It's like paying a premium on e-bay to be one of the first to get something, or because your too lazy to line-up for one. If you are willing to pay that price, that is your market price.




Good Shepard
By acer905 on 9/14/2007 3:11:41 PM , Rating: 2
This entire situation to me feels like Stevey boy, being the good little shepard that he is, decided to off a few sheep, and the try to comfort the rest by giving them some extra time out on the range, havin a snack and mowing his lawn for him.




Uh? WTF?
By Nik00117 on 9/14/2007 6:11:41 PM , Rating: 2
At my pizza store, we avg roughly a 70% margin if you only factor in the pizza and the materials that we had to use to produce the product. WE NEVER SELL AT A LOSE PERIOD.

This refund is BS imho, Poeple who bought the iphone that early without waiting are IMHO completely idiots. WAIT ON TECHNOLOGY let others do the testing for you.

If I sell a PS3 box on eby for 10,000 dollars and the guy pays for it and everything and it is clearly indicitated htat indeed this is a box then hey, supply and demand, I wanted 10k he wanted the box, we traded. Sure its ungodly good deal for me and truly a patheic deal for his. Is it illegal? Nope... Is it morally wrong? Not in my eyes

its business poeple.




Unlocked phones get the code?
By severtki on 9/15/2007 11:45:11 AM , Rating: 2
Oooh -- what about users who unlocked their phone and aren't using AT&T anymore? Will they be able to receive the text message and $100 offer? Wouldn't that be delicious if they couldn't... ? :)




1st Kid On the Block
By starcannon on 9/15/2007 2:31:45 PM , Rating: 2
When the latest greatest gadget comes out, everything from Game Consoles to Cell Phones, you expect to pay a huge premium to be the first kid on the block to have it.
No one here payed $200 too much, they paid the market value for the latest greatest gadget. Apple is being too generous in offering up any kind of retroactive rebate as it is, if you don't like paying the bleeding edge tax, then don't ride the bleeding edge, wait a few months.




Loss of confidence
By crystal clear on 9/16/2007 1:44:55 AM , Rating: 1
Yes every company has the right to cut its prices as and when it likes,but in this case people will remember this incident.

Yes they say people/buyers have short memories & will forget-but certainly not those who get their finger burnt.

The next launch of an Apple product will be the victim of this incident.
Most will prefer to hold back their purchases & await a price cut.

Trust is very hard to gain & very easy to loose !

Buyers will be very careful next time !




"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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