iPhone price cut: Official response from Steve Jobs

[socks]

If you bought an iPhone in the last 14 days can you return like other apple products? If so....

1) Go claim your credit
2) Return the phone
3) Buy the phone again with the credit. - Price $299 ??

 

[amac4me]

Nice move Steve. I suppose most will either use it towards a new iPod nano or Mac OS X Leopard.

So what's the cost to Apple ... lets assume 800,000 early adopters at $100 per adopter that makes it a $80 million concession (at least on paper). We all know that the retail price of anything includes a markup so the real cost is something close to 60 - 70 million dollars. A small price to pay considering the level of anger amongst iPhone owners. Oh yeah, let's not forget the PR.

 

[irun5k]

Funny with all the pissed off people yesterday, there were what? 59 pages of whiners? And today there are only 8 pages saying thank you!

Uhh... the 59 pages took around 20 hours to generate.

 

[kellen]

I guess according to you, Apple and Steve spent countless nights in the back room and planned all of this? Guess they had more time on their collective hands than I even thought!!

Funny with all the pissed off people yesterday, there were what? 59 pages of whiners? And today there are only 8 pages saying thank you!

We love to bitch about Apple and deflame Mr. Steve Jobs, but the same people as so ungrateful they can not say thank you!

I never said that, this is you incorrectly deriving information from my posts.

My point was that they had to have seen the backlash from the owners coming. Perhaps they didn't its just my opinion.

I already said thanks, yesterday when the store in Lynnwood, WA refunded me the difference on both of my apple iphones that I bought on release day.

Also it was just announced 20 minutes ago about the rebate. It was announced 24 hours ago about the iphone price adjustment. Hardly a valid comparison

Have a good day!

 

[tkidBOSTON]

Whatayaknow. It was tkidBOSTON's idea. Steve Jobs read it here and ran with the idea! Nice work, tkidBOSTON!

Unless, as some suspect, Apple had this planned all along.

Under which of these circumstances would Apple make the most overall iPhone profit for the year?

1. $200 price drop. Some early adopters are annoyed enough that they make fewer other Apple purchases, at least for this holiday season. Lots of holiday purchasers buy iPhones.
   
   
2. $200 price drop, $100 store credits for early adopters. Placated early adopters continue being customers. Lots of holiday purchasers buy iPhones.
   
   
3. $100 price drop. Fewer complaints from early adopters; most continue to buy Apple products as usual. Fewer holiday purchasers buy iPhones due to the higher price, but there's more profit per unit.

Hmmm, Apple planned this all along, huh? Hmmm... thinking... thinking...

Nah, I'm going to take credit for this one.

 

[daveporter]

I believe that Apple owes me nothing, however, since they are offering it, I will use it to purchase my wife an iPod Touch. Ever since she saw the new iPod add Apple sent around today by email, I have been receiving massive hints from her.

That will bring the cost down to $299 for the 16 GB version which is a very fair price for essentially a hand held computer as far as I'm concerned.

 

[MarkMS]

If this is true, then I for one will be an Apple fan once again!

$100 credit or not, the iPhone was worth every penny back on 6/29. I still love Apple, still a big fan, and was never really upset at the price drop. Just as he said in the open letter, the technology sector is a bumpy road. I was fully aware that the price was going to drop. It just comes with the territory of being on the bleeding edge of technology.

Even though I will be taking this credit, it will taken more as a thank-you from Mr. Jobs and not as an apology. He and his company does not have to apologize. They just want to increase the user base.

Even though you NEVER lost me as a loyal customer.

Thank you, Apple!

 

[totolad]

Lucky

I think you are all well lucky over there! Anyways, my Grandad who was a great man had a saying, "Pioneers always Pay"

 

[gibbz]

Simple Logic Goes A Long Way

I have read through all of the 1500 or so posts about the iPhone price drop.
I myself purchased my iPhone 17 days ago. I think if anything, I had more of a reason to be "upset" than any of the iDay people. I mean they had it about a month and a half longer than I did. I was 3 days out from being covered by the 14-day return policy. However, I was not really upset and here is why. It is really quite simple and logical.

I understand the 33% price drop after 2 months was shocking since Apple has routinely kept price points the same while increasing technology. However, realize this is NOT the computer industry we are dealing with, it is the phone industry. Prices, technology, and incentives change much more rapidly. This is what happens when Apple removed the "computers" from their name. They are branching into other fields and we can no longer bank on their practices remaining the same across the board.

I offer this to you for consideration. I think it is clear that Apple will offer a 16GB iPhone soon. They likely haven't due to limited supply of NAND flash. So think back to release, we had a low-end iPhone for $499 and a high-end iPhone for $599. Now assume that in the next month or two they release a 16GB version. That would mean we once again have a low-end model and a high-end model. Except this time they are 8GB - $399, 16GB - $499 (maybe). So essentially Apple would have reduced the price points for the low and high-end models by $100 each. This isn't so bad. They have continually kept computer price points level while increasing technology. This is essentially what Apple did with the iPhone except they lowered the price to include more customers (this is quite reasonable).

So I think people just need to sit back and realize they didn't get screwed. If indeed a 16GB version is released at $499. That means your high-end model was $100 more than the new high-end. That is okay though because Steve just comped us the $100 with his offer today. So all is right with Apple and everyone just needs to adjust to the fact they are selling products other than computers. Just think logically.

Thanks Steve for this generous offer. His foresight to appease angry customers, while misguided with said anger, is invaluable to Apple stock holders and the corporation.

 

[bobrik]

Yesssss Yesssss Yesssss
To All Those People Who Called Us Whiners

I LOVE YOU STEVE JOBS THANK YOU SO MUCH

LOL, just yesterday I was reading tons of "I HATE YOU STEVE JOBS! **** YOU SO MUCH!"; and today: "I LOVE YOU STEVE JOBS! THANK YOU SO MUCH!".

It shows a nice strategy: to please customers, you must first piss them off with some mistake, so that later you can surprisingly please them with correcting the mistake.

I wonder whether people would be so fond of this action if Steve announced the refund right at yesterday's media event. But he did not, he instead made early iPhone adopters subject to 1 day of intense psychological pressure and pissed-of-ness, and after this one of their anger, he totally turned the game around, making people who hated him love him. That's psychology in action.

Simply genius

I don't say it was his plan. But it is simply amusing to see this possibility of purely psychological play .

 

[zwida]

Legend. Absolute legend. Now I feel obliged to buy an iPod Touch even though I don't need one. This is marketing at it's best.

Exactly. I think my wife has a surprise iPod gift to look forward to...

 

[zap2]

Wow...still happy, I got to return mine, and get 600 store credit(plus the tax!)...but this is still a welcomed move!

 

[Peace]

Good work, fellow iPhone early adopters.

We spoke loudly and ignored those trying to silence us as "whiners." I don't think Apple caved in- rather I think they realized it was the right thing to do. I'm not sure why it bothered other people that we were trying to gather some momentum, but this proves that it was worth it.

Further, this was a shot across the bow in a couple of ways to Apple. First, I think the market let them know that the iPhone price point was too high- so they reduced the prices. Second, we let them know that even as their most loyal fans and early adopters, we're not completely brainwashed fan boys. We know where the line is.

Not to bust your bubble but this was planned..

Anybody remember the last quarterly conference call where they said due to a "transition" profits would be lower for the Sept. Quarter?

 

[p0intblank]

This is awesome news! I'm so glad Steve Jobs responded to the customers. Can you say "money towards Leoaprd!"? =P

 

[72930]

This is awesome news! I'm so glad Steve Jobs responded to the customers. Can you say "money towards Leoaprd!"? =P

Or even "Money towards a Mac", thus gaining Apple even more $$$

 

[matznentosh]

Too bad Jobs didn't think of doing this at the announcement yesterday. THAT would have been an incredible publicity coup.

"Oh, and by the way, now that we are dropping the price of the iPhone, we're going to reward all our loyal iPhone customers with $100 early adopter bonus!"

 

[tgildred]

The fine print

*$100 credit good towards purchase of the iPod Hifi only.

 

[AirmanPika]

Meh the more I think about this the more I see through the distortion field. Jobs' little PR stunt just made them a massive profit. $100 discount for buying an iPhone from apple. Grand. Now as this thread shows people will be flocking to apple to buy iPods and Computers. Of course this may also show how much markup on every other product they sell. Apple will be making $150+ on the majority of people now instead of losing customers.

They didn't do anyone a favor, they just suckered the fanboys again is all.

 

[Abraxx]

I guess according to you, Apple and Steve spent countless nights in the back room and planned all of this? Guess they had more time on their collective hands than I even thought!!

Funny with all the pissed off people yesterday, there were what? 59 pages of whiners? And today there are only 8 pages saying thank you!

We love to bitch about Apple and deflame Mr. Steve Jobs, but the same people as so ungrateful they can not say thank you!

Why do you think it took hours?
You are counting pages of whiners in a forum?
Yes people tend do what they are told to do.

 

[colinmack]

Very crafty, eh?

So, this will "cost" something like 500,000 * $100 = $50,000,000, eh? I am assuming that there are 500,000 phones sold that will be eligible. $50 million seem like a lot of money for an "advertising" campaign. But then again, 100% of this money comes back to in sales. But the exposure out there is immense! Much more than if they had run TV commercials and print ads. Money well spent. Go The Jobs!

Will cost even less to Apple, as they only have to account for *their* costs, not the retail cost - the margins/profit are a wash. So let's say people use the store credit for higher-margin items (100% markup for accessories isn't uncommon), then that $50M may only actually cost Apple $25M.

Then if not everyone takes advantage of it, could be only $15-20M...all of a sudden this is pretty cheap publicity for Apple, and creates tons of happy evangelistic customers. Not a bad score, all in all...

 

[tkidBOSTON]

Meh the more I think about this the more I see through the distortion field. Jobs' little PR stunt just made them a massive profit. $100 discount for buying an iPhone from apple. Grand. Now as this thread shows people will be flocking to apple to buy iPods and Computers. Of course this may also show how much markup on every other product they sell. Apple will be making $150+ on the majority of people now instead of losing customers.

They didn't do anyone a favor, they just suckered the fanboys again is all.

Geez...
Damned if you do, damned if you don't, eh?

 

[iSee]

Thanks Steve!

Thank you Steve! I can swallow a $100 price-drop (effectively) without bitterness--the $200 made me want to gag.

Heh, giving the $100 as store credit actually works in my favor since I'm "not allowed" to buy any more stuff for a while...

Thanks again, Steve!

 

[freddiecable]

Let's do some modest calculation:

500 000 x 100 USD = 50 000 000 USD (or probably more)

 

[Cameront9]

You got to be freaking kidding me. This is unheard of in the business world, this one tells you how much they must be making on the iphones, and two how many people were really so upset about this.

Seems like NO ONE remembers that when Aperature had a price drop Apple did the exact same thing.

 

[50548]

YAY!

TO ALL THE HATERS who tried to make us feel bad yesterday

I wonder if there is ANYONE STILL OUT THERE not thinking that SJ is THE BEST CEO EVER in the history of modern corporations. Totally unnecessary by him or by any market standards; but he was still classy enough to throw the whiners a bone, as a PERFECT PR/CUSTOMER SERVICE MOVE.

AWESOME, SJ, JUST AWESOME.

A new iPod will be DEFINITELY on its way home soon for me...no wonder I ONLY buy Apple. You guys ROCK!