Thanks a lot for the sour persimmons, Steverino!

[thatcrazycajun]

Apple Inc. announced today it is dramatically lowering the MSRP for its latest coolth-conferring tech-toy, the iPhone, to $400 just in time for the holidays (see story here). Yep, you read right: a reduction of two whole Benjamins from the original steep price of the base model.

Boy, am I glad I wasn't one of the suckers who shelled out  for one of these doohickeys early on. Apple's announcement begs the question: Why in the name of Adam Smith, may God rest his long-dead soul, didn't you thieving gonifs price the sonuvabitch this low to begin with?!? Were you deliberately trying to gouge and rip off all those early adopters, counting on the hype to lure them in despite the sticker shock? (And I say this as a longtime repeat Mac owner and Apple fan in general.)

This smacks of more "just because we can" behavior on the part of Apple, which emanates from the top down (yes, Steve Jobs, I'm looking at you).

Comments

[filkerdave.livejournal.com]

Possibly the sales were far below expectations and they decided to lower the price as well.

[stevemb.livejournal.com]

Apple's usual pattern has been to maintain its price points and add feature improvements. Price cutting suggests to me that Apple management is worried about the iPhone (in which they have bound more of the brand image than was perhaps prudent) fizzling out.

[autographedcat.livejournal.com]

Er...free market?

Prices on electronics *always* go down. That's what they do. You can buy a 50" plasma High-Def TV for under $2000 now, in many cases under $2000. Not long ago, they cost as much as a decent used car. recently bought a 22" flat panel monitor for my computer for $300. Not long ago they were over $1000. The price on the 30Gb iPod is now about $250, and it was not long ago twice that.

Early adopters always pay for the privilege of having the cool new thing *now*. If you wait, the price almost always goes down. That's how the market works in electronics, and if you care to examine trends back far enough, how it has *always* worked.

Good grief. Perspective isn't optional.

[thatcrazycajun.livejournal.com]

I know perfectly well electronics go down in price with time, but not this steeply and this quickly. Fer gossakes, it's only been two frakkin' months since the thing was released! To drop it a full third in price this soon bespeaks one of two things: either trying to recoup a massive investment in R&D and publicity quickly, or fear of the initial hype wearing off and sales tanking going into the critical holiday shopping season. Either way, those who have already paid the higher price are screwed far worse than if the reduction were smaller and more spread out over time.

A $50 reduction, possibly even $100, wouldn't have struck me as exceptional or noteworthy, for the reasons you cite. This kind of massive cut does.

[the-gwenzilliad.livejournal.com]

Either way, those who have already paid the higher price are screwed far worse than if the reduction were smaller and more spread out over time.

Nah. They've got the coolest smartphone released in the last, oh, forever. They're happy, or at least that's the overwhelming response I've heard.

Apple regularly releases coolth, then cuts prices by quite a lot. The MacBook I bought last October, when the dual core MacBooks were very new, cost twice as much as the ones I priced in California, just six months later.

And when the iPhone is released here in the UK? They'll be lining up around the block for it, just like in your country. :-) You can be happy that you didn't pay that price and feel smarter for waiting if you like, but the people with the coolth still have the coolth. ;)

[filkerdave.livejournal.com]

What are the sales figures for the iPhone with respect to the forecast sales?

[thatcrazycajun.livejournal.com]

That's what I wanna know, and have no idea where to find out. Dropping the price this drastically, this soon after product launch, bespeaks (to my non-B-school-trained mind, anyhow) one of two things: 1) Apple was trying to recoup its initial investment in R&D and publicity at an accelerated rate and always planned to drop the price later in the year; or 2), the more likely scenario (based on what I read in the industry press): that Apple is afraid the massive hype surrounding the iPhone will wear off (and it probably will), causing sales to tank heading into the retailer-critical holiday shopping season unless something serious is done. Or worse, that sales are already below early projections (whether due to price, the AT&T lock-in or whatever) and Steve & Co. are panicking.

[autographedcat.livejournal.com]

From InformationWeek:

The Apple iPhone led smartphone sales in the United States in July, beating Research In Motion(RIMM)'s BlackBerry, the Palm Treo, and other rivals, a market research firm said Tuesday.

In addition, iPhone sales equaled those of the most popular feature phone in the United States, LG's Chocolate, iSuppli said. The Apple gadget, a combination media player and mobile phone, accounted for 1.8% of all handset sales in the United States.

ISuppli attributed the meteoric rise of the iPhone in large part to demand built up by months of hype leading up to the gadget's release on June 29. The real proof of whether Apple has a big winner will be determined in the coming months as demand patterns stabilize.

Nevertheless, the first full month of sales is impressive, given that the iPhone beat out well-entrenched competitors. "While iSuppli hasn't collected historical information on this topic, it's likely that the speed of the iPhone's rise to competitive dominance in its segment is unprecedented in the history of the mobile-handset market," the research firm said in a statement.

ISuppli predicts Apple will ship 4.5 million iPhones this year. By 2011, the company is expected to ship 30 million units. Currently, the devices only are available through Apple andAT&T( T), the exclusive service provider.

The typical iPhone buyer in July was male, 35 years or younger, and held a four-year college degree or higher. The actual breakdown of iSuppli's survey of iPhone buyers was 57% were 35 years old or younger, 52% male, 48% female, and 62% college educated. In addition, one out of four iPhone buyers switched wireless carriers to AT&T.

Based on iSuppli's definition, the iPhone falls between a smartphone and a feature phone. The device isn't quite a smartphone because a user can't load third-party software. On the other hand, the iPhone is more feature rich than the typical feature phone, such as LG's Chocolate.

Nevertheless, Apple shipped more iPhones in July in the U.S. than RIM did BlackBerry devices and Palm did Treo handsets, iSuppli said. IPhone shipments also easily beat smartphone shipments from Motorola(MOT), Nokia(NOK), and Samsung.

(The article goes on to talk about some lawsuits from people unhappy with the phone, but that was all of the sales-related part of the article)

[avram]

IPhones are selling great; Jobs said in the presentation that they're on track to sell their millionth iPhone this month. By comparison, the original iPod sold about half that many units in its first year.

That right there is the reason for the higher price: High demand. Hundreds of thousands of people wanted an iPhone right now, so they paid a premium.

[shelleybear.livejournal.com]

Now that people have found a way to break IPhone's provider lock with A.T.&T.
He's going for quantity of sales.

alternatively

[a-phoenix-afire.livejournal.com]

Maybe they outsold even their most optimistic predictions and decided to give their consumer base a break. If this is a correct inference and they hadn't dropped the price, then the accusation of gouging would be well founded.

Aside from that, I'm with autographedcat. Prices often drop early and precipitously. I remember specifically wanting an external dvd burner in spring of 1997 and taking a pass because of the $800.00 price, then getting the same model for my desktop at Christmas for $400.00. That's not two months but it is 50%.

[tollermom]

If I had to guess, part of it is related to the release of the new iPhone-format iPod, which should seriously reduce (through sheer volume) their cost of goods for the parts (screens, memory, etc.) shared between the two.

I'm expecting to see a 16gb (or possibly more) version of the iPhone to retake the top price point by MacWorld in January.

[mdlbear]

The reason is pretty simple, actually: they were way behind on their sales projections. Sales were astronomical in the first couple of days, then tapered off exponentially.

[avram]

What were Apple's projected sales figures?

[mdlbear]

I believe they were initially projecting a million units by the end of September. At the rate pre-price cut, they were apparently going to fall way short, though I don't have the numbers handy.