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iPhone price cut: Official response from Steve Jobs

BigdoggAU said:
I am truly amazed at how all of the people that have posted intelligent arguments defending the price cuts and bashing the "whiners" fail to address all of the issues here. While I am an early adopter of new tech gadgets, I have none of the allegiance to Apple which may have motivated many to purchase. I fully understand the consequences of early adoption. Here are a few points that don't get consistently addressed.

1. The reason I am ticked (not so much tonight) is that this price cut didn't pass a simple lithmus test: Given the opportunity to have the iPhone for 69 days "early" for $200, would I have done it? The answer is a clear "hell no"!

2. People seem to think that you can't have believed the iPhone was worth $600 and still be pissed. BS. Just because I was willing to pay $600 doesn't mean I would not have preferred paying $400.

3. The timing is almost unprecedented. 69 days?! For most other tech, the whole month of September would still be considered the "early adoption" period. I love all the weak examples of other products depreciating over entire years. This was 2 months! Clearly a simple case of too much too soon.

Overall, I'm still happy with the phone, but Apple may have done irreparable damage. I wonder if potential iPod Touch buyers will pause for 2 months before they take the plunge?
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Isn't it possible that they are getting huge discounts now from Hon Hai (the actual manufacturer of the iPhone). The new sales volumes for an iPod that has the features of the iPhone without the phone is perfect since it can sell into every market on the planet, rather than just the USA.

The touch screen, the memory, some chassis parts, etc. All will now be far higher quantity, which drives the fixed costs way down.

I doubt it's $200.00, but it's probably a good chunk. The flexibility of the higher volume certainly let them drop the price somewhat.

Just a thought.
 
I'm absolutely stunned. They certainly didn't have to do this.

But...

Almost makes me think the whole thing was planned from day one (the budgeting, the timing), mighty good PR, don't you think?

Launch it at an artificially high cost, but not so high that your die hard fans won't still lap it up anyway. Put the extra money that you didn't really need in the kitty then refund half of it a few weeks down the line when you announce a huge price drop. BAM, as if a price drop wasn't good enough PR, you then treat your loyal customer base to a refund on a product that was priced unnecessarily high in the first place. Apple only give half back and are still laughing all the way to the bank while customers kneel at their feet, and the news of Apples godly like behaviour spreads over the media like wild fire.

http://up.*************/files/1/Images/Smilies/Dogeyes.gif

Fishy if you ask me, but whatever, at least people won't be feeling so cheated :rolleyes:
 
bourbon32 said:
Any of you WANKERS without a college degree goign to tell me how to make my iphone die so i can return this pos for an 8gig
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Take a phone call under the shower. That's how I killed my Siemens S 65.

Maybe you should shampoo your hair before, so it's smelling like "Nah, I was taking a shower while the ICU down at the Mayo clinic had to call me back about a treatment plan...sorry, I saved a life and broke my phone!"

But you could also hack it and sell it as unlocked via eBay to some of us poor European suckers still waiting for it :D
 
This is why I'm an apple user. They really take care of their customers even when they don't have to. Can you imagine Microsoft doing this?
 
i got burned

personally, i felt like i'd been punished for being a good customer and getting the phone right away, since the price dropped dramatically so quickly.

i think that $100 is a great investment by apple, to keep me happy, and to keep those of us who can afford and will buy a $500 phone happy.

because i was really pissed. :mad:

but now i have $100 and i'm glad. :D
 
Phew bet that was a gutsy emergency board meeting ;

SJ to Board : "People are upset. I've decided were going to have to give them back $100,000,000. ok?"

Board: 15 suits simultaneously spit mouthfuls of coffee across the table "did you just say give back $100,000,000?Are you off your rocker?That's all the money Creative ever made in the last 5 years!!."

SJ: "Yep, that's why were the greatest company in America, maybe even the world. Sign here - it's happening!."

Man that guys got diamond balls...:eek:

All you iphone early adopters lucked out!..Nice...
 
edesignuk said:
It's not $100m though is it, it's store credit, which means in real money terms it's probably more like $50m.
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This time next quarter it's $100M LESS on the balance sheet - one way or another that's real money or $100M of real product leaving the business which ever way you care to look at it...
 
you americans

People who can afford a $600 telephone are not poor and thus are not in need of any refund.
 
This sucks...I bought my iphone off ebay and don't have a receipt, I do know that they guy I bought it from, bought it from an AT&T store somewhere is Houston, Texas...think I can still get some help with just the serial number????
 
surferfromuk said:
This time next quarter it's $100M LESS on the balance sheet - one way or another that's real money or $100M of real product leaving the business which ever way you care to look at it...
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hmmm, perhaps. It's still not going to cost them as much as if they had actually sent out $100 cheques to everyone to spend where they please.

Plus given my theory a few posts up on this the whole thing was planned and budgeted for anyway.
 
surferfromuk said:
Phew bet that was a gutsy emergency board meeting ;

SJ to Board : "People are upset. I've decided were going to have to give them back $100,000,000. ok?"

Board: 15 suits simultaneously spit mouthfuls of coffee across the table "did you just say give back $100,000,000?Are you off your rocker?That's all the money Creative ever made in the last 5 years!!."

SJ: "Yep, that's why were the greatest company in America, maybe even the world. Sign here - it's happening!."

Man that guys got diamond balls...:eek:

All you iphone early adopters lucked out!..Nice...
Click to expand...

Ah But that's only if he didn't plan this whole thing!!!

I think that the iphone was intentionally overpriced 200 bucks. Apple knew loyalists would do what they do. Wait in line. Pay the 600 for the phone, make news. blah blah blah.

Then 2 months later do two things: Drop it to the real price which would get the non-loyalists attention and Two get buzz for screwing them over... then very quickly make nice with the loyalists by giving all 100 dollars in Apple cred. (and what Mac Addict wouldn't love that?). All the fans are happy which in turn also makes the non-fans green with envy. Plus Apple gets that extra hundred to boot!

Brilliant! This move alone makes me wanna invest my life savings in this company.

Edit: Edesignuk and I are on the same wavelength.
 
people who complained are loosers

people who complained are loosers

dont get me wrong i feel your pain, but thats life!

the easiest way for me to put this across is by saying that if you KNEW the price would go down $200 in a year id say at least 95% of you would still have bought it because you were prepared to spend your money anyway and you wanted it there and then, do i not remember loads of queuing? if you werent you wouldnt have bought it! if you had have know apple would have dropped the price in 2 months YOU STILL WOULD have queued for hours outside an apple store just so you could be one of the first to experience the iphone no matter what the price was.

i know your gonna say "yea but two months" - why are you seeing this as apple kicking you in the balls? cant you see this as a good thing from apple? two months is two months, two months wage, hell where i come from house prices rise as much as $50k in two months, doesnt mean you are getting any more or any less" its simply life

and the only thing you have archived by sending all your whiney 14year old style emails apart from getting $100 back (which is nothing btw) is that apple will have learned from this, i can bet your asses that apple will not drop the price of its products like this again, because they'll be afraid of all you complaining ass holes going off on one again.

point is i bet most of you who complained would have still spent the $600 two months ago even if you had have known they were gonna drop $200 now.

/rant over
 
edesignuk said:
hmmm, perhaps. It's still not going to cost them as much as if they had actually sent out $100 cheques to everyone to spend where they please.

Plus given my theory a few posts up on this the whole thing was planned and budgeted for anyway.
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Well, don't take this the wrong way but I do think your being a little cynical. Your basically accusing him of being like a 2-bit card shark.

Nobody makes a long term plan to upset then placate customers - because placated is all they are.

You have to admit that's crazy policy and it's not the kind of thing Steve Jobs or any board member is going to have go down in the minutes nor does it reflect a particularly healthy mental attitude.

No - I'm convinced this was not planned even 1%...BUT I'm sure when they discussed the price cut at the board, probably only last week!!, the 'problem' of early adopters was raised and left at 'well we'll see what happens but we may have to give something back' - that's a contingency plan not some long term devious screw em plan like is being suggested...

Now back to the true cost ;

Iif it's all spent on Apple product which we know run generally at 33% margin is at minimum $70,000,000 - with a LOSS of $30,000,000 of profit on that revenue - even if it's to buy more expensive Apple kit it's still a proportionate loss and probably mostly from Apple die-hard fans that were going to buy new Apple kit anyway. If it all goes in iTunes then the loss is probably nigh on a clear cut $90,000,000.

It's an amazing give-away however you want to spin it, and as I said Companies like Creative are lucky to make that kind of money never mind give it away...

This is good for Apple, good for early adopters and good for stock holders as it shows Steve Jobs is 100% 'on the job' and sympathetic to how his business operates.
 
Masterful stroke - resolve people's complaints publically, quickly, effectively and openly - and everyone loves you more than they did before. Apple really showed their intelligence and good business sense here.

Quite a risky move - there's a chance now that with every price drop the same people will be expecting rebates even though this was a one-off. But right now it's worked brilliantly.

I did sympathise with those who'd lost out, especially eBay users who are still suffering (although personally I hate eBay, it's full of fake crap, just try looking for a Shuffle!) and I'm glad Apple have decided to be fair.

If people are still complaining even now, then they're just whiners and would still be whining and/or dreaming up conspiracy theories even if Steve had given out free Mac Pros.

Way to go Apple. PR at its best.
 
Peligro said:
Ah But that's only if he didn't plan this whole thing!!!

I think that the iphone was intentionally overpriced 200 bucks. Apple knew loyalists would do what they do. Wait in line. Pay the 600 for the phone, make news. blah blah blah.

Then 2 months later do two things: Drop it to the real price which would get the non-loyalists attention and Two get buzz for screwing them over... then very quickly make nice with the loyalists by giving all 100 dollars in Apple cred. (and what Mac Addict wouldn't love that?). All the fans are happy which in turn also makes the non-fans green with envy. Plus Apple gets that extra hundred to boot!

Brilliant! This move alone makes me wanna invest my life savings in this company.

Edit: Edesignuk and I are on the same wavelength.
Click to expand...

He couldn't have planned on apple fanboys (like I was) never trusting Apple again. If Apple releases another new product, I'll back away. Way to win fans SJ.
 
The only clear winner here is...

MacRumors, who can thank all you guys for increased site traffic, it sure will translate into more ad revenue. Great!

Also, I have been endlessly entertained by the comments posted by so many self-absorbed people (I have never seen this many in one place, really) in last two days - it became humorous after all.
 
edesignuk said:
Ok, but don't take this the wrong way, I think you're being a little naive.
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Ok I'll be naive if you will at least confirm this is something along the lines of what your suggesting went down in the board meeting 6 months ago ;

SJ: "Let's overcharge for the product when we release it - that should ensure lots of comments about how expensive it is and a lower than achievable adoption rate, then in 2 months we'll drop the price by $200 and give the early adopters $100 vouchers back.!!"
Board to SJ : "and what exactly will that accomplish?"
SJ: " It'll really p*ss everyone off and hinder initial sales"
Board: "Great Plan Steve. I'm really glad we spent 3 years developing this product just so you can p*ss of the customers with this insanely great take and give-back plan of yours"
 
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