iPhone price cut: Official response from Steve Jobs

[Cloudane]

Apple cares about profit first

Welcome to capitalism.

Apple is a business, people, not a charity. They didn't do this out of the goodness of their hearts; they did it to control the damage done to their reputation and re-gain a fair percentage of the customers they lost (in fact they'll regain all of them for at least one purchase, because it's a voucher). In fact it's a bit more than what you'd normally expect ($50-70ish?) which has managed to put a positive spin on the whole thing (with the exception of a few whiners who will never be happy even if Steve personally handed them a check for $1000)

Profiteering and spin, they all do it. All is fair in love, war and business. Just some companies are more subtle with it than others.

At the same time, I really doubt that there was a conspiracy. It'd have been a big gamble. Why not just stop whining at everything. They drop the price - people whine. They give you $100 credit - people whine. What do you all want, blood??

 

[MadDog31]

Funny about all the complaining.

Yeah the price got dropped pretty fast, but ya know what...I was still happy I paid $600 for my iPhone on the first day because it meant I had an iPhone. Now Apple is giving me $100 to spend at their store...that's great! Depending on how long I can hang onto that $100, I plan on making the jump from PC to Mac next summer.

Yep, Apple will make a ton of money off of giving me the $100, but who cares. I'm still getting $100 to spend. Being a PC user, this has shown me that Apple indeed cares at least an ounce...but tons more than what other companies would ever think of doing. It's things like this that make my jump to Apple next year all that more exciting.

We're always going to live in a world of complainers because you can't make everybody happy, but in this instance, you can consider me ecstatic for getting $100 I didn't expect to get in the first place.

 

[mstell168]

"I'm not convinced surfing the internet on a phone will go over very well. Thus the price cut. I haven't used one thou."

yeah, I think that's probably one of the most ignorant posts I have seen on here.

 

[elcid]

I'm not convinced surfing the internet on a phone will go over very well. Thus the price cut. I haven't used one thou...

Right....


There is a reason people call the Blackberry a Crackberry. Open your eyes. They didnt drop the price cause the phone wasnt nice, they dropped it cause they can reach so many more who will attest that the iPhone is amazing.

 

[pritchet1]

Get Early Adopters to come back and buy more from the Apple Store

If I read this correctly, there is a "restocking fee" associated with the voucher to get early adopters to come back and buy more stuff from the Apple Store. How is that a $100 cheque and rebate for early adopters?


It just puts more money in the bank for Apple using a glorified coupon process.

Hello world?

Ju Jitsu by Apple.

 

[izzle22]

If I read this correctly, there is a "restocking fee" associated with the voucher to get early adopters to come back and buy more stuff from the Apple Store. How is that a $100 cheque and rebate for early adopters?


It just puts more money in the bank for Apple using a glorified coupon process.

Hello world?

Ju Jitsu by Apple.

No you did not read that correctly. There is no restocking fee to get the $100 credit toward any thing in the store. Did you even read the letter or just skim through it and get your own version. Please read these things before you post.

 

[happydude]

so ignorant

"If you always wait for the next price cut or to buy the new improved model, you'll never buy any technology product because there is always something better and less expensive on the horizon."

I'm so sick of hearing this! Why not a $100 rebate?

Or why not price it at 399 in the first place?

Apple cares about profit first, customers second, or third or fourth....

People will be even more uncomfortable about buying anything else except iPod.

I'm not convinced surfing the internet on a phone will go over very well. Thus the price cut. I haven't used one thou...

You haven't even used an iphone. where do you come off saying anything? apple by no means had to give anything back. the whiners who have been swearing off apple and never buying a mac again (meaning you'd be stuck with, what . . . a dell . . . how's their customer service going to keep you happy . . . ) were just bluffing. now they get their $100 to pay for 10.5 or 101 itunes songs or whatever. how many iphones has apple sold? 700,000? that's a $70 million gift because jobs and apple really really loves and appreciates their customers. that $70 million totally unnecessary gift should be viewed as an amazing gesture so be happy with it and for once stop complaining.

the post from maddog31 regarding the $100 gift card and how he's more likely than ever to switch over now. i'm sure this was a factor into jobs's decision on top of keeping early adopters happy. brilliant move. stop complaining. this is business and customer service at its finest.

 

[iliketomac]

Originally Posted by islanders
I'm not convinced surfing the internet on a phone will go over very well. Thus the price cut. I haven't used one thou...

Translation: "I have not the least clue what I'm talking about."

Jeez.

Jim

Double ditto on that! He hasn't used an iPhone but has the nerve to rant off... DUH!!!

 

[uk_blaster]

You haven't even used an iphone. where do you come off saying anything? apple by no means had to give anything back. the whiners who have been swearing off apple and never buying a mac again (meaning you'd be stuck with, what . . . a dell . . . how's their customer service going to keep you happy . . . ) were just bluffing. now they get their $100 to pay for 10.5 or 101 itunes songs or whatever. how many iphones has apple sold? 700,000? that's a $70 million gift because jobs and apple really really loves and appreciates their customers. that $70 million totally unnecessary gift should be viewed as an amazing gesture so be happy with it and for once stop complaining.

the post from maddog31 regarding the $100 gift card and how he's more likely than ever to switch over now. i'm sure this was a factor into jobs's decision on top of keeping early adopters happy. brilliant move. stop complaining. this is business and customer service at its finest.

Thank chr*st. This post sums the situation up well, happydude.

I'll tell ya all one thing. I have been lurking on this board for about four years. I rarely post unless I have something constructive to contribute.

This board has really gone downhill since about the time that Apple announced the Intel transition. It has taken a even steeper dive since the iPhone announcement back in Jan.

I attribute this total lack of posting content due to all the switchers infesting this board now.

Sorry to go off topic like that. But this thread and the other iPhone price drop thread are a PERFECT example of the continuing trend of piss poor posting I have been noticing more and more in the last 2 years on this board..

Shame on you. You all know who you are.

 

[pritchet1]

I guess we will know details next week

No you did not read that correctly. There is no restocking fee to get the $100 credit toward any thing in the store. Did you even read the letter or just skim through it and get your own version. Please read these things before you post.

I'm on the AABA (Apple Authorized Business Agent) list, so this is under deep scrutiny over there.

As Apple wrote, "...the details are being worked out".

How do you "prove" you are an early adopter? And by bringing in the iPhone, will the standard 10% restocking fee kick in?

I hope I am wrong. See you next week.

 

[e2interactive]

"If you always wait for the next price cut or to buy the new improved model, you'll never buy any technology product because there is always something better and less expensive on the horizon."

I'm so sick of hearing this! Why not a $100 rebate?

Or why not price it at 399 in the first place?

Apple cares about profit first, customers second, or third or fourth....

People will be even more uncomfortable about buying anything else except iPod.

I'm not convinced surfing the internet on a phone will go over very well. Thus the price cut. I haven't used one thou...

Show me a company out there who doesn't want to make a profit? That's got to be the point of any company to survive and prosper. Sure they could have priced it a $399, but they didn't and people bought it, including me. They made a profit, that's the point. I have the iPhone, I love it, I'll take the $100 credit, sure I was a little bugged at first but I thought well hey that's how it goes. Now I'll have a copy of Leopard that I don't have to tell my wife that I need another $129 for, just now how do I get her to let me have $29, lol.

 

[poppe]

I know beggars can't be choosers, but it sucks that it is going to be an Apple gift card.

I really don't want anything at Apple, and won't for a long time so what am I gonna do with a $100.

I was really looking forward to getting my printer fixed.

 

[jackc]

I know beggars can't be choosers, but it sucks that it is going to be an Apple gift card.

I really don't want anything at Apple, and won't for a long time so what am I gonna do with a $100.

I was really looking forward to getting my printer fixed.

It'll probably have a decent expiration length, you'll want something soon enough!

 

[s10]

I'm on the AABA (Apple Authorized Business Agent) list, so this is under deep scrutiny over there.

As Apple wrote, "...the details are being worked out".

How do you "prove" you are an early adopter? And by bringing in the iPhone, will the standard 10% restocking fee kick in?

I hope I am wrong. See you next week.

How does one proof to be an early adapter?
Because you bought an iPhone and activated it through iTunes.. so.... by giving your telephone number, they know when you bought the Iphone..(ever heard of sim number?)


What has restocking to do with it?

 

[janstett]

I was teetering and agonizing over buying the iPhone... All the stars were aligned. I needed a new PDA after not using one for a few years, my 2 year contract with Verizon was up, my bluetooth headset died.

I hesitated at $599 because for that I wanted GPS, and the missing features like voice dial baffled me. So I waited.

The $399 price drop pushed me over the edge and my iPhone is on the way; and I'll live with the imperfections, hope they support bluetooth GPS, and fix what they can in software (voice dialing, cut and paste, inconsistent rotation). The last reason to hesitate is this: why such a huge price drop after 10 weeks? Are they trying to clear inventory to make way for the 2nd gen device?

I felt bad for the wonks on line 10 weeks ago who paid $599 and didn't get to bask in the glow for a full 3 months.

But props to Apple for the price drop, and for soothing bruised egos with the $100 rebate to existing owners. Companies don't normally do this kind of thing. Tip of the hat to Apple.

 

[izzle22]

How do you "prove" you are an early adopter? And by bringing in the iPhone, will the standard 10% restocking fee kick in?

Ahhhhhhh, receipt?????

 

[janstett]

Right....


There is a reason people call the Blackberry a Crackberry. Open your eyes. They didnt drop the price cause the phone wasnt nice, they dropped it cause they can reach so many more who will attest that the iPhone is amazing.

The skeptic in me says they're trying to move inventory and clear the channels for a 2nd generation phone.

The business person in me says Apple has a chance to gain huge marketshare by dropping price (car companies do this all the time, trade profit for marketshare). Strategically I think they're doing this to head off the clones (e.g. Nokia) before they hit the market.

Think about it, every phone manufacturer on the planet is, at this very moment, either blatantly ripping off the iPhone for their next design or incorporating its ideas in their design.

By this time 2008 everybody will have ripped off the iPhone. Maybe Apple won't be ready with the next gen by then -- therefore they need to fight the war with price, and they just went nuclear.

However, they are legitimately vulnerable on the following fronts:
- CDMA carriers (Verizon, Sprint)
- Countries in which Apple doesn't sell the iPhone

Anyone with an iPhone clone will play in those markets without challenge from the original.

 

[finchna]

It should have been at most a $200 merchandise coupon just like they're offering early purchasers. Crazy to take a $200 hit on each phone.

 

[ryano144]

I think the point that a lot of people are missing here is that this refund is store credit, and that it will drive a good portion of the people who bought an iPhone back into apples stores where many of them will buy something that costs more than $100.
I for one plan to pick up a macbook that I have been putting off buying for a while, and although the refund isn't that big it got me thinking of what I want from the apple store.
in the end they are giving out $50,000,000 (which all cuts into iphone profits) but may drive sales in other categories enough to make up for it.

 

[G5isAlive]

much ado

about nothing.

are people posting only to see their own words?

Hi mom. Hi dad. Look at me, I can type! Weeeeee

Hey Steve, you can make mistakes. Who knew?

 

[henjin]

You've made a mistake

I was teetering and agonizing over buying the iPhone... All the stars were aligned. I needed a new PDA after not using one for a few years, my 2 year contract with Verizon was up, my bluetooth headset died.

I hesitated at $599 because for that I wanted GPS, and the missing features like voice dial baffled me. So I waited.

The $399 price drop pushed me over the edge and my iPhone is on the way; and I'll live with the imperfections, hope they support bluetooth GPS, and fix what they can in software (voice dialing, cut and paste, inconsistent rotation). The last reason to hesitate is this: why such a huge price drop after 10 weeks? Are they trying to clear inventory to make way for the 2nd gen device?

Good luck

You have though neatly and concisely detailed the faults of this first revision iPhone. These are the reasons my friends who need a PDA-phone for work will never use an iPhone.

Below are my personal reasons why I did not buy an iPhone:

I toyed with the idea of getting one as my Verizon contract is up at the end of this month. However it's all down to taste. I signed up yesterday for an Ocean from Helio. Really liked the slide keyboards and the 3g web, GPS, now with a voice direction offering but really what clinched it for me, comparing it only with Verizon, was all the data is as much as you can eat, the only by the minute plans are for voice. I can transfer my old cell number at anytime later.

SMS text is unlike AT&T unlimited. You can for a mere 105 or so a month get all you can speak voice plan, which is also cheaper than AT&T. Though the iPhone plan is very good compared to Verizon's data plans. But in my part of NYC AT&T is horrible.

The other factor in my spending $195 on the Ocean it was on sale, though not at 33% discount Also the 30 day happiness guarantee. I need at least 20 days to find out if the phone is faulty. Also if I find Helio in NYC is ghastly I can return it easily and nothing is lost. Oh and the phone sales staff at Helio cheered hello and welcome. Almost Apple like... hope the service is good.

That's why I can't buy Apple. Their biz plan is too stingy. The iPhones lack basic industry standard hardware features, while boasting a new interface.

Still let's hope we both do not regret our choice. at least I have 30 days to make up my mind Good luck!

And before the Apple only hounds get me in my sleep I'm planning to buy another Apple computer a MacPro... so don't kill me, I'm spending more with Apple than Helio... forgive me.

 

[izzle22]

I think the point that a lot of people are missing here is that this refund is store credit, and that it will drive a good portion of the people who bought an iPhone back into apples stores where many of them will buy something that costs more than $100.
I for one plan to pick up a macbook that I have been putting off buying for a while, and although the refund isn't that big it got me thinking of what I want from the apple store.
in the end they are giving out $50,000,000 (which all cuts into iphone profits) but may drive sales in other categories enough to make up for it.

I don't think anyone missed that point. It's common sense, although common sense is not that common. Still I think all the adults here understand the concept of the $100 refund/cert.

 

[nemaslov]

I don't have an iPhone yet but I bought a RZR day one for $499 with a two-year service contract in early 2005. Six months later, Motorola dropped the price to $199 . By the end of 2005, the price was $99.

I never got a refund or store credit or anything and I loved that phone. Still do.

 

[nemaslov]

I know beggars can't be choosers, but it sucks that it is going to be an Apple gift card.

I really don't want anything at Apple, and won't for a long time so what am I gonna do with a $100.

I was really looking forward to getting my printer fixed.

Then why did you buy a friggen phone with an Ipod inside? Buy some songs and save the music biz or at least the musicians. Or hey, for $100. you can get a NEW printer.

The skeptic in me says they're trying to move inventory and clear the channels for a 2nd generation phone.

The business person in me says Apple has a chance to gain huge marketshare by dropping price (car companies do this all the time, trade profit for marketshare). Strategically I think they're doing this to head off the clones (e.g. Nokia) before they hit the market.

Think about it, every phone manufacturer on the planet is, at this very moment, either blatantly ripping off the iPhone for their next design or incorporating its ideas in their design.

By this time 2008 everybody will have ripped off the iPhone. Maybe Apple won't be ready with the next gen by then -- therefore they need to fight the war with price, and they just went nuclear.

However, they are legitimately vulnerable on the following fronts:
- CDMA carriers (Verizon, Sprint)
- Countries in which Apple doesn't sell the iPhone

Anyone with an iPhone clone will play in those markets without challenge from the original.

It should NOT be any surprise that come January and MACWORLD there will be Gen two of the iPhone. It have gave more memeory and have a few improvements.

 

[840quadra]

You iPhone owning guys and gals are really lucky and hopefully thankful for this!

I can bet that many that recently purchased a Nano, or otherwise recently wished this was the case for them!