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8GB iPhone Price Drop, 4GB iPhone Discontinued
- Thread starter snowboarder
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1. There are early adopters, there will always be early adopters. They may not be the same, but I bet the people that stood in long lines for the iPhone arent going to "abandon" apple.
2. If you didnt see this coming then your not paying attention. One the iPhone was not in competition with real phones. Sure it was something more, but it was grosley inflated. Also the groups that tear apart the phones and tell you how much it would cost apple to put them together put them at like 250 or something.
3. Everything drops. Maybe not that fast or that far but they do. This is your tax for being the "cool person" and having so many looks and questions about your phone.
You bought early, and amazingly Apple brought the iPhone into competition. Let the moaning continue.
2. If you didnt see this coming then your not paying attention. One the iPhone was not in competition with real phones. Sure it was something more, but it was grosley inflated. Also the groups that tear apart the phones and tell you how much it would cost apple to put them together put them at like 250 or something.
3. Everything drops. Maybe not that fast or that far but they do. This is your tax for being the "cool person" and having so many looks and questions about your phone.
You bought early, and amazingly Apple brought the iPhone into competition. Let the moaning continue.
I would just like to apologize to any upsets, temper losses or hurt-feelings I may have caused.
Ah, but 2 months after Leopard is released Apple will not drop the price on it, I'll bet you money on it if you like.
Actually, no: what I'll do is look at the European launch price and decide if I'm willing to pay that price to have the features that are on offer in the 'phone at that time (I guess that's what all the US buyers did too, no? Oh, wait....). If I am, I'll buy it - even though I know it'll drop in price at some point. Like any tech product, you could wait forever - there's always better/cheaper/faster around the corner. If I need it, think it's a fair price and can afford it, I'd rather be using the thing.
Why did Apple lower the price?
Most users seem to be very pleased with their iPhones. I don't think the iPhone's market position (just my opinion) has changed much since the introduction. I also believe many people would have continued to purchased iPhones at the inflated introductory price without any qualms. Most people who can afford an iPhone and can use the service plan will buy it. Period.
It is obvious that Apple's method of lowering the price offended many early adopters, however, in retrospect most of those adopters were happy with the iPhone, they just aren't happy that the price dropped.
This is like an employee that is making a good wage and happy in their employment. After they find out that someone else is making more money, they get all bent out of shape and start hunting for another job. Some even get mad and quit before they look for another job, much less have one. If they were happy with their wage before finding out about another coworker's salary, why should their attitude change? We tend to not be objective when it involves our own money and self worth. This lack of objectivity is insane and it is typical human behavior, but insane nonetheless.
If Apple had lowered the iPhone price $50, people still would have complained. The extra $200 per unit sold is a lot of money to Apple's bottom line. If we can assume that they have sold 750,000 phones that's $150,000,000 of additional revenue. Apple is going to spread that revenue over a long period of time but it is still a lot of extra revenue showing up on the quarterly report for a couple of years.
The iPhone's higher introductory price was probably intended to help defray the development costs. Those costs would include software development, hardware development, tooling to manufacture the unique components and creation of assembly lines, package design, package tooling, activation software development, activation hosting, advertising and a lot of other things that go with the development and release of a sophisticated consumer electronic item.
Another issue is the after sale liability. What if the phones start having high failures, bursting into flames, self dialing porn chat lines? It sounds funny, but look at the problems Mattel is having thanks to Chinese suppliers. Apple will eat the losses on those unusable phones. The risk of introducing a new product where you are expecting to sell millions, has a tremendous liability exposure.
With the hefty introductory price, even if the iPhone had slow initial sales, Apple stood to keep making a profit. That's not unreasonable. It also put money in their war chest in case there were any unexpected expenses due to previously mentioned product failures as well as patent issues, activation issues or plain old market failure.
If the iPhone had been introduced at real production cost plus say a 10% or 20% markup, how long would it have taken Apple to recover all of these upfront costs?
As a stockholder, I think Apple made the right initial decision to price the iPhone where they did. I also know that the $200 price upset some early adopters.
I've been bit many times by being an early adopter of computers, cameras, video equipment, hi-fi equipment and the list goes on. That's part of being a consumer. If you choose to buy in to a new revolutionary product, you might be buying the wrong product. Anyone ever hear of BetaMax, 8 tracks tapes, De Lorean, Quadraphonics? We've all been there. Sometimes the market settles down in relatively short periods of time, other times it might take years.
Remember, Apple didn't just cut the price for the heck of it. There is a motive. If we were smart enough to figure out the motive, we could probably predict the stock market, or maybe even pick the winning lottery numbers.
I believe Apple either intends to plow into the cell phone/PDA market full throttle with the current iPhone or maybe there is a new product already in the forefront. Either way, I think Apple stands to gain a tremendous marketshare with the price reduction of this phone. They are already beating up the competition in the cell phone/PDA market. With some software tweaks to correct some of the shortcomings of the iPhone software Blackberry and Palm better watch out.
Ciao
Most users seem to be very pleased with their iPhones. I don't think the iPhone's market position (just my opinion) has changed much since the introduction. I also believe many people would have continued to purchased iPhones at the inflated introductory price without any qualms. Most people who can afford an iPhone and can use the service plan will buy it. Period.
It is obvious that Apple's method of lowering the price offended many early adopters, however, in retrospect most of those adopters were happy with the iPhone, they just aren't happy that the price dropped.
This is like an employee that is making a good wage and happy in their employment. After they find out that someone else is making more money, they get all bent out of shape and start hunting for another job. Some even get mad and quit before they look for another job, much less have one. If they were happy with their wage before finding out about another coworker's salary, why should their attitude change? We tend to not be objective when it involves our own money and self worth. This lack of objectivity is insane and it is typical human behavior, but insane nonetheless.
If Apple had lowered the iPhone price $50, people still would have complained. The extra $200 per unit sold is a lot of money to Apple's bottom line. If we can assume that they have sold 750,000 phones that's $150,000,000 of additional revenue. Apple is going to spread that revenue over a long period of time but it is still a lot of extra revenue showing up on the quarterly report for a couple of years.
The iPhone's higher introductory price was probably intended to help defray the development costs. Those costs would include software development, hardware development, tooling to manufacture the unique components and creation of assembly lines, package design, package tooling, activation software development, activation hosting, advertising and a lot of other things that go with the development and release of a sophisticated consumer electronic item.
Another issue is the after sale liability. What if the phones start having high failures, bursting into flames, self dialing porn chat lines? It sounds funny, but look at the problems Mattel is having thanks to Chinese suppliers. Apple will eat the losses on those unusable phones. The risk of introducing a new product where you are expecting to sell millions, has a tremendous liability exposure.
With the hefty introductory price, even if the iPhone had slow initial sales, Apple stood to keep making a profit. That's not unreasonable. It also put money in their war chest in case there were any unexpected expenses due to previously mentioned product failures as well as patent issues, activation issues or plain old market failure.
If the iPhone had been introduced at real production cost plus say a 10% or 20% markup, how long would it have taken Apple to recover all of these upfront costs?
As a stockholder, I think Apple made the right initial decision to price the iPhone where they did. I also know that the $200 price upset some early adopters.
I've been bit many times by being an early adopter of computers, cameras, video equipment, hi-fi equipment and the list goes on. That's part of being a consumer. If you choose to buy in to a new revolutionary product, you might be buying the wrong product. Anyone ever hear of BetaMax, 8 tracks tapes, De Lorean, Quadraphonics? We've all been there. Sometimes the market settles down in relatively short periods of time, other times it might take years.
Remember, Apple didn't just cut the price for the heck of it. There is a motive. If we were smart enough to figure out the motive, we could probably predict the stock market, or maybe even pick the winning lottery numbers.
I believe Apple either intends to plow into the cell phone/PDA market full throttle with the current iPhone or maybe there is a new product already in the forefront. Either way, I think Apple stands to gain a tremendous marketshare with the price reduction of this phone. They are already beating up the competition in the cell phone/PDA market. With some software tweaks to correct some of the shortcomings of the iPhone software Blackberry and Palm better watch out.
Ciao
Good point.
The $200 price difference pales compared to this.
When you look at it this way, the iPod Touch will probably sell well for those who want the coolness of the iPhone but don't need a phone.
I am a loyal fan of Apple. I recently bought a new IMac and the latch would not open so I could upgrade the memory. I brought the computer back to the Apple store. They couldn't open it either. Without even asking, they brought out a brand new IMac in the box. I thought that was an example of doing the right thing.
Nice Post. It made me realize something though. If Apple was making say $250 per iPhone (8gb) @$599 wouldn't they now have to sell at least 5 times as many phones to get the same amount of return? Does anyone think the $200 drop is going to generate a 5 fold increase in sales?
Boy, Apple just cannot please people can they. They offer a big price drop on the most wanted gadget of the year so most people can afford to have one, and all they get back, from the most loyal fans no less, is huge negative publicity and complaints.
Apple could have EASILY kept the price at $599 through the holidays, and sold another million of them in conjunction with a Starbucks ad campaign or something, and made plenty of profit. Instead, they wanted more people to have them from this point forward, and have a higher volume with lower margin per unit. This is wonderful news from Apple, and will really help the iphone gain market share. The early adopters paid their $200 extra to be the first ones on the block to have one, but let's look at the bigger picture here. This is really going to help Apple create a large market around this device, and in turn it will help you early adopters as well, with more software development and accessories becoming available.
Apple could have EASILY kept the price at $599 through the holidays, and sold another million of them in conjunction with a Starbucks ad campaign or something, and made plenty of profit. Instead, they wanted more people to have them from this point forward, and have a higher volume with lower margin per unit. This is wonderful news from Apple, and will really help the iphone gain market share. The early adopters paid their $200 extra to be the first ones on the block to have one, but let's look at the bigger picture here. This is really going to help Apple create a large market around this device, and in turn it will help you early adopters as well, with more software development and accessories becoming available.
Well, when I first saw Apple dropped the price on the iPhones I was actually very excited and thought it was a very good move by Apple. I thought when I come to this site and see the post about it there will be nothing but positive on this news. Than I saw most people were unhappy about this news. Anyway, I am an iphone owner and I was on that line to get mine the day it come out and I am happy to say that I love this phone and this purchase. However, now I do feel that it was kind of early for Apple to change the price and slap us in the face. I think just like the people who have just recently purchased the phone and are getting $200 back we also deserve some money back, even if it is in the form of credit towards another apple product. With that money I can purchase one of the new iPod Nanos and use it while I am running or I could even purchase an Apple TV. I hope Apple does something about this.
Increased sales of the iPhone along with the iPod Touch will help decrease the cost to manufacture.
I think it will definitely generate a multiple increase in sales. 5 times....maybe not but close.
Proliferation of the device is what Apple is interested right now. Then they go for the kill. More apps, updates, etc. will drown the competition.
Moderator at least give me time to edit it, is that OK?
Sushi; when is it expected for you? I'm sure it'll be easy enough to unlock in the UK, every phone is, and I'm rather surprised that Japan hasn't received them yet, when most of the parts originated there!
Sushi; when is it expected for you? I'm sure it'll be easy enough to unlock in the UK, every phone is, and I'm rather surprised that Japan hasn't received them yet, when most of the parts originated there!
This price drop of the iPhone is a very unusual situation. Can't really compare to computers and iPods. The cell phone world is heavy on giveaways and the smartphone market is unique to the masses. This was a big gamble and Apple has now changed that world. The price of 599. was correct. It had to come down. Maybe too soon, but look at it this way: the work that went into the iPhone design and interface also went into the new Touch iPods. Now that those have arrived, Apple can share costs of componets between the two. They will sell so many more Touch Pods than iPhones and therefore their componet prices go down and thus can sell the iPhone cheaper now.
Well, my plan of action is clear....
Well, I won't abandon apple. However.....
I think the easist way to get Apple's attention is to simply slow down our purchases. Simply ask ourselves, do I REALLY need this. Apple doesn't make anything I HAVE to have.
My collector edition iPhone (4G) has applecare until 5 Jul 09. If it breaks before then, Apple will replace it with a better phone. But if Apple thinks that I will replace it with a 8 or 16 or 32Gig whatever iPhone, they are sadly mistaken. The earliest I will shop for a new phone is July 09.
As I told the Apple Store rep when I canceled my ipod purchase, I will simply upgrade the iPod I have.
The Apple evangelist at my MUG this weekend almost talked me into buying an appleTv. I can live without it.
Applecare is a wonderful thing to have. My laptop will not be replaced until it dies. It will be upgraded with a new hard drive. My order with fastermac went out today.
My desktop will be replaced. However, I won't replace it until the next gen MacPro hits the refurb store. In the meantime, I will upgrade the CPU (again) when I get my next paycheck.
I don't see anything in Leopard that I have to have. Therefore, I will not upgrade the laptop OS until I see something I have to have.
I have always had confidence that Mr. Jobs would screw up Apple badly at somepoint, just like the last time he was in charge. It took a while, but he didn't let me down.
Well, I won't abandon apple. However.....
I think the easist way to get Apple's attention is to simply slow down our purchases. Simply ask ourselves, do I REALLY need this. Apple doesn't make anything I HAVE to have.
My collector edition iPhone (4G) has applecare until 5 Jul 09. If it breaks before then, Apple will replace it with a better phone. But if Apple thinks that I will replace it with a 8 or 16 or 32Gig whatever iPhone, they are sadly mistaken. The earliest I will shop for a new phone is July 09.
As I told the Apple Store rep when I canceled my ipod purchase, I will simply upgrade the iPod I have.
The Apple evangelist at my MUG this weekend almost talked me into buying an appleTv. I can live without it.
Applecare is a wonderful thing to have. My laptop will not be replaced until it dies. It will be upgraded with a new hard drive. My order with fastermac went out today.
My desktop will be replaced. However, I won't replace it until the next gen MacPro hits the refurb store. In the meantime, I will upgrade the CPU (again) when I get my next paycheck.
I don't see anything in Leopard that I have to have. Therefore, I will not upgrade the laptop OS until I see something I have to have.
I have always had confidence that Mr. Jobs would screw up Apple badly at somepoint, just like the last time he was in charge. It took a while, but he didn't let me down.
Sorry but I don't quite understand the problem? I contacted apple about the price drop (having purchased my iPhone from AT&T the day it came out)... and they said there was nothing they could do because I bought it from AT&T (hello ipod+hp again)... so I contacted AT&T and they were wonderful on the phone and credited my wireless service $200... so I get free cell service for like 2.5 months... Whats the big deal if they are making right on this folks?
- Eric
I have been an Apple customer for 27 years. This is the first hiccup. Still the best products and I have had great response from them. I puchased a beautiful Panasonic Plasma three years ago and four months later it was $2000. cheaper....I am still watching beautiful picture it displays. I don't think all of the iPhnes stopped working yesterday.
Indeed. Well written and argued, martingale.
Yup. The more folks who have iPhones, the more incentive for developers to write apps/hacks/mods for it because the RoI is better.
So yes, I paid $200 more then I could if I had waited a month, but six months from now, I'd still have paid $200 more. But now, in six months I'll probably have a lot more features and functionality with my iPhone because so many more people will have one then if Apple had waited six months to drop the price.