Blog Post

Apple drops iPhone prices. Users get ticked.

If you haven’t heard already, at yesterdays event Steve Jobs announced that on top of dropping the 4GB iPhone, the price of the 8GB iPhone would be dropped by $200 to $399 (from $599…for the mathematically challenged).

The iPhone was released barely 2 months ago and thus a few users (especially those who dropped $600 on a phone) are a bit ticked.

A few points have been made in regards to negativity towards the price drop.

I think Gruber summed it up best:

…for those of you who’ve already bought one and are pissed about the price cut, if you didn’t think the iPhone was worth $599, you shouldn’t have bought it. That’s how supply and demand works.

I certainly understand both sides here. I know if I had purchased an iPhone and paid the equivalent of a new computer, I’d be ticked too. Being upset over spending $200 more than what you’d have to pay now is reason to be upset. But you’ve got to take things in to focus here.

Jobs is being completely honest when he says “that’s what happens in technology.” In a technology age dominated by short product life spans and competitive markets, Apple is doing what they have to to stay competitive in a volatile market like the mobile phone industry.

As Gruber said, if you didn’t think the iPhone was worth $599, you shouldn’t have paid that much for it. It’s not about customer loyalty or respect. It’s not about you some how thinking your iPhone was any type of “investment” that wouldn’t drop like a rock in value. It’s about business and supply and demand. Period.

30 Responses to “Apple drops iPhone prices. Users get ticked.”

  1. If you want an investment, buy real-estate or something. If you want to be one of the first to own an iphone, then get in that queue and part with your cash.

    Makes me wonder why more of you are not habitual drug users, it has the same ‘upper then downer’ coaster ride experience.

  2. Apple can certainly do whatever it wants with its pricing. However, they are alienating their most loyal customers and that is bad business. Apple has never dropped the price of a product so quickly; so quickly in fact, that it almost appears as if they knew they were going to change the price before the initial release. Next time Apple comes out with a “hot” product who is going to rush to buy it? Not me. We naively thought Apple was “different” from other companies. Now we know better.

  3. louis laregina

    I disagree in this case.

    It’s one thing for a consumer to feel that a certain product has a specific value and quite another when the company that makes it tells you, quite plainly, that it is not as valuable as you thought: suck it.

  4. I can’t say I’m pissed, because I bought the iPhone the day it came out and I *needed it*. My 3-year-old motorola was dying and getting very bad reception. I have no regrets.

    Still, I wanted to be an early adopter. I think it’s fun to be an early adopter, and also a little crazy. Think about it: we all (those of us who bought one) dropped $600, or roughly the per-capita GDP of Somalia, on a phone, in most cases sight unseen. We did this because we have total and complete faith in Apple, that the product is gonna rock.

    But that’s a two-way street. If Apple keeps taking that faith for granted, and begins to use it cynically to goose their short-term numbers, then some of us are going to wise up the next time around. And when iPhone v2.0 comes out, and it rots on the shelves because all us early adopters are convinced the price is going to drop in half within 60 days, Apple will have a problem.

    That’s what this $100 credit is about. They know they’re developing an image problem with the early adopters, and they want to restore our faith. It’s a mutually beneficial relationship, and both sides intend to keep it that way.

    (Sorry I keep using “faith.” It has religious overtones that I don’t intend to convey. What I mean is “confidence.”)

  5. The very people who are moaning like Mahalia were the ones who line-sat to get an iPhone.
    I bought Aperture the first day that it was released – $499.00
    A short time later I received an email from Apple with a $200.00 credit – no kicking, screaming or yanking my hair to get it.
    If you want to be the first, you must pay.
    You must have known that prices were going to drop – right!?

  6. Todd — Apple is in completely unknown territory. They’ve never ventured outside the personal computer market except for the iPod until the iPhone and Apple TV.

    I’d say that in the home computing arena, a six-month or 12-month refresh isn’t unusual, but in mobile electronics, that’s two generations.

    It’s also the first time Apple’s had people lining up for days in advance to buy a product like it was the hottest toy at Christmas.

  7. People make it sound like Apple stole money from you off rather than buyer and selling making an agreement to price. Myself, I waited to buy an iPhone because I expected the price to drop a lot and because I’m waiting for my Verizon contract to expire. I made my choice and you made yours. If you are ticked, you should be ticked at yourself for paying too much for being an early adopter, not Apple for charging as much as they could reasonably charge when they released the phone.

    You also have to bear in mind that the original pricing had to be somewhat conservative (i.e., higher) because Apple did not definitively know how many they would sell, that the product would be a success, and that their volumes could support a lower price. Pricing only changes for future customers, sorry!

  8. Supply and demand is not the point.

    Here’s why a lot of people are ticked: Apple doesn’t do this to their customers. Apple traditionally doesn’t punish early adopters.

    The next generation will of course be a better deal – slightly lower price, better specs, etc. – after a year or so, but that’s not quite as painful.

    I jumped in and bought an iPhone for just that reason – I knew that from prior history Apple doesn’t discount products after only 60 days. And they especially don’t discount by 1/3. If they had, a lot of us would have waited.

    Apple is in a bit of unknown territory here – a PR event gone wrong.

  9. The products being so damn good is really the problem. I may not be in a rush to spend money, but I’ll almost certainly be buying apple products – what’s the alternative, really?

    There ARE alternatives, but I’d actually like to want to use my products not tolerate using them.

    But customer service, and how you treat your loyal customers is part of it too – Apple slips up, they won’t get any slack because they are Apple and have generally been pretty good to consumers.

  10. I’m completely with you (and Gruber) on this one, Josh. My contract with Verizon just expired two weeks ago, but did I switch to an iPhone? No. I didn’t think it was worth $600. And while it may be worth $400, I’m not ready to pay $400 for it.

    In reply to hchen, why don’t you? The answer (at least for me) is that Apple still has superior products. OS X is far superior to any version of Windows. I just dumped Office 2004 for the new iWork ’08 — and I’m a writer so I have to interface with Word users but I’d rather spend the effort converting things on my end than to use Word to “fit in.” iPod versus Zune? No question. I agree with you that Apple may be taking a more Microsoft-like business model, but the fundamental difference is that it’s not at the expense of their products. Mostly. (Still unhappy that Leopard was delayed.)

  11. Eric Hamilton

    We all know caveat emptor but you all mean to tell me that you don’t think that Apple should take more care with their customers. It is a rather large early adopter penalty to pay. Not to mention I doubt that this was a last minute price change. Rather I’m almost positive this was Apple’s strategy from the start. We all know technology prices go down over time but this is certainly an extreme. I think it definitely gives Apple a black eye and I certainly view them differently than I did last week. I think its safe to say that Apple has no regard for its customers and I can lump them in with Microsoft. It is a free and open market so let your dollar vote. I know I will and Apple will not see the same revenue stream from me as it previously has. BTW, I bought my iPhone 17 days ago and I was able to get a $200 refund today at the Apple store. You can also call up AT&T and threaten to cancel your contract if its been within 30 days. You probably don’t want to but at least it will send the message. Corporations can play there games but so can consumers. We are not without options and nothing speaks louder than the dollar.

  12. Matt Radel

    Personally, I think it’s the benefit of having a successful device. We’re seeing the same thing that happened with the iPod – just at a much, much faster pace. Folks forget that 3-4 years ago we where paying over $400 for an mp3 player.

    But it all comes down to whether or not you got “screwed” in this deal. Since I didn’t, I’m pretty happy about the fact that I can now snag one of these puppies without forking over my first born (sorry early adopters).

  13. If Apple just want to be a strictly business without loyal customers, so be it. There were many situations we didn’t need to buy Apple products but we did anyway.

    So if Apple is just like another microsoft, why we don’t just choose microsoft or any other company if they have mainstream products and more features.

  14. DeVon McDougal

    Come on guys if you want the be the first to buy something you are going to pay a premium. Apple users tend to forget from time to time, that ultimately apple is a buisness first and foremost. I just feel lucky that i sold my 8 gig iphone on Tuesday filled with music for 550.00 on craigslist.

  15. And if that is all it was, it’d be fine. But it’s not. There are two key points here that are what are pissing people off:
    Time of discount
    and scale of discount

    Being in union. Tech does drop. But it doesn’t go that fast. If they shaved off $50 bucks, I’d not care, but they didn’t – they took off the price of a new ipod after 2-3 months.

    As someone who has had two replacements in that time period, with no accidental insurance coverage (and one was defective) and I had to pay for one of those replacements….

    I’m pissed. Because it was slimey. Is it within their purvue to do it? Were they within their rights? Sure. So are most the actions we all despise by Microsoft, or DRM using companies, or hardware manufacturers who sell crap products like Dell.

    Can they do it? Did we tacitly agree to it? Yes. But it’s also slimey, and not the sort of thing I’d expect from Apple and you can be damn sure I won’t be rushing out and buying the next great thing they do anytime soon. And I’ve no doubt many others will follow suite.