Steve Jobs has penned an open letter to iPhone customers in which he defends the iPhone price drop but also indicates his feeling that “we need to do a better job taking care of our early iPhone customers…. We want to do the right thing.”
Therefore, we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T, and who is not receiving a rebate or any other consideration, a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store. Details are still being worked out and will be posted on Apple’s website next week. Stay tuned.
Very smart. As I argued not moments ago in a comments thread on this very site, “I think Apple would be smart to offer some sort of reward to early iPhone buyers as a thank-you for being on the forefront. That would be a good marketing decision, in my opinion.”
File this under smart marketing. Because as Jobs points out:
Second, being in technology for 30+ years I can attest to the fact that the technology road is bumpy. There is always change and improvement, and there is always someone who bought a product before a particular cutoff date and misses the new price or the new operating system or the new whatever. This is life in the technology lane. 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. The good news is that if you buy products from companies that support them well, like Apple tries to do, you will receive years of useful and satisfying service from them even as newer models are introduced.
In other words, this stuff happens in the technology world… but several thousand points out of 10 to Apple for doing right by their customers, when they didn’t have to. That’s smart — and good news for all the people on the iPhone cutting edge.
For more, read Comrade Moren’s take at MacUser and Peter Cohen’s on the mother ship.
[Hat tip: Reader Erin Bird]
And the next time there's a price drop, everyone points to this.
Gimme a break, there was *nothing wrong* with dropping the price in advance of the holidays. The entire reasons for people thinking they're owed anything can be resolved to a two word phrase:
Entitlement Queen
I can't believe Apple capitulated to this kind of mass temper tantrum that I wouldn't put up with from a two year old.
Drop one third of the cost of a newly released, very desirable product in 68 days. People on the fence buy immediately. People previously uninterested because of price now on the fence. People who paid the 599 feel jilted. What's wrong with that?
And it's only because Apple doesn't portray itself as stepping on its customers in a bloodthirsty quest for profit at any cost that people feel jilted. That and the fact that part of the reason Apple can drop the price so much is because these same people helped make the product sucessful by buying it and letting people touch it, use it.
This is a smart move by Apple (both the price cut and the store credit). They should have done it this way from the beginning. They should also know better than to rankle their most loyal fans and enthusiasts (usually the most vocal of their customers).
Next Apple will offer refunds to anyone who bought stock only to see the price drop immediately.
This was done for one reason and one reason only--to quell the chants of "Remember the iPhone!" the next time it releases a new product with a premium price.
Right, Dave-O. You could argue that this $100 per user rebate will make them more money (in store sales driven by the $100 coupon, and in more confidence among early adopters) than they'll lose buy giving out the rebate....
I think this $100 credit was the right thing to do, and I salute Mr. Jobs and Co. for doing it.
HOWEVER...
Steve Jobs is a very, [i]very[/i], smart man. He surrounds himself with smart people at Apple, not to mention the marketing and PR agencies the company contracts.
I can not believe for one moment that NONE of these people didn't see this coming. So even as a hard core non-conspiracy-theorist, I am left with the only logical conclusion: the response to the consumer backlash to this price cut was planned well in advance, as was the price cut itself.
If the $100 credit was announced at the same time, it would have been lost in all the other announcements. Sure, you have some people who want more than the $100 credit, but most of them wouldn't have been happy if the credit was immediately announced anyway.
So now Apple gets 2 days of press: one for the announcements, and one for "taking care of their valued early iPhone buyers."
Maybe I give them too much credit, and they really did just underthink this. But I'd be surprised.
This is quite a surprise and I can't recall Apple offering any money back (beside the standard 10/14 days policy) after you purchase any Apple equipment.
Price drop should not be a surprise in the tech world, especially for new electronic gadget like the iPhone.
So the keynote on the 5th was a really good one, and I was not mad that Apple dropped the price : early adopter factor...
So this $100 is quite a good news !
Steve
http://inewsonly.com
The first ZUI news aggregator for iPhone and iPod touch
This is what I think of the iPhone. I didn't create the thread but it says it all in outrageous way!
http://ispgeeks.com/wild/modules.php?name=Forums&file=viewtopic&t=624#2760
Remember folks, who did Apple bring BACK in to save the sinking ship after John Sculley rammed it into one iceberg after another????
STEVE JOBS!
There is probably no shrewder, more visionary CEO on the globe than Steve. His business acumen is exceeded only by his creative genius.
I'm gonna use MY $100 store credit to buy ANOTHER iPhone!!
I am glad the iphone price came down. I just dont like it that it seems that apple has joined the ranks of the mainstream corporate america in its methods of maximizing profit at any cost. Even Mac enthusiast, Chuck Joiner from Macnotables is justifying apples actions by saying all tech companies do it, look, Motorola does it.... WELL MAC DOESNT DO IT (until now) and thats what made them special. I am upset because Apple is gone, it has been replaced with a greed machine that planned to screw loyal Apple supporters to maximize profit. Even the "apology" is laced with another way for apple to make money from their base. Please, how is dropping the price on a 2 month old product part of technology as Jobs puts it?....its all Bushtalk covering the well calculated plan. I want apple to succeed, I just think there could have been a better way to do it than to rape their trusting fans.
I'm a happy camper. I bought my iPhone at the end of July for what I thought a fair price and now I get a rebate. Is this a great company or what. I believe the key to the price drop is not sales weakness, but a kicker coming in from AT&T. They announced over 25% of signups were not from previous customers. Usually that kind of crossover gets an added incentive from the phone company. Apple started out with a luxury item at a luxury price, expecting to do a million units. They found themselves with a runaway hit and I believe got extra margin from AT&T. They sharpened their pencils, probably got another extra little kick from AT&T ( who only has a two year window ) to lower the price and decided to go for volume. Remember, they have proven they don't need their independent Apple stores or Best Buy to sell these, so they don't need that much margin to make a big profit. They have producer, distributor and store margins to work with if they and AT&T are the only channels of delivery.
I owned a cell phone store for 11 years, and NEVER did the carrier offer credits to customers who purchased before a price drop. Kudos to Apple for this move. But, I don't think most of the e-bay sellers who bought and re-sold these deserve the credit. I suppose they can just use the credit at the itunes store?
After 6 months, a price drop is expected, but 2 months, price drops are simply irresponsible for a company to do to the true client base that waited "patiently" for the iPhone to be released.
The $100 store credit is a good start, but I can tell you, it will simply just mean that true Apple fans will be spending more money at the Apple store, since $100 will not get you far.
I'm taking my "early adopter rebate" and buying Apple Care for my iPhone (with a little change left over for some Apple dodad).
The price cut was good for Apple, just don't insult those loyalists who bought one so close to introduction.
Steve overlooked that in the equation. Many of us (business owners and otheres) buy thousands in Macc products each year. Never owned a PC. Never will. We all know technology changes. Dumping the price on a product less than 2 months old that hundreds of thousands (the bulk not mac users) bought and not expecting a blacklash?
What were they thinking?
Is all publicity good publicity in Steve's mind?
I, along with millions of other Apple fans who wanted the i-phone immediately, were extremely disappointed at the news yesterday of the $200 price cut in TWO MONTHS!
Finally, Jobs took care of the problem with the article in print. But, we have to look at the inner core of the problem. Jobs and Apple cut out the hearts of their loyal fan base who wanted to get their hands on something that was supposed to be sacred. Not some ornament that Apple decides to say, "yeah, here you go sucker and sap, buy it now and you'll pay over 50% more than if you wait 2 months when we'll reduce it for our mainstream customers who we want to cater to". That to me is a despicable act.
This is a situation where people payed hard earned money for a product that they wanted. But, in the end they were deliberately being mocked at by some corporate greed. You said yesterday, "that you paid for what you thought it was worth two months ago"...sure, yeah makes sense...but, why would Apple decide to smack the loyalists in the face and sucker punch us in the gut later. I have never heard of a practice like this.
If I, and everyone else were told that if you wait for 2 months you will save just over 50% on your iphone purchase--I doubt very much anybody would have bought their i-phone on that fateful day of June 29, 2007.
So where does this greed and dishonesty go from here? It's going to bring on a wave of mistrust and suspicion on all levels of any Apple product that is in newly released. How can one trust a company like this when it's loyalists are stoned and hung from the public rafters.
Also, your Apple loyalist has to feel swindled. The bottom line is that if Apple would have produced a better product in the iphone (with 3G Network and just as good as a battery life) then we, the loyalists would have had no complaint. But, seeing that this was after the dollar it makes you just shake you head and ask why?
The point to consider is that Apple felt guilty and pressure from their loyal following that Steve Jobs had to act. That's an admission to guilt.
So, in closing shame on you marketing department at Apple. Shame on you, all of you at Cupertino, Shame on you CEO Steve Jobs for blundering on this one, and pity to the rest of us who have to have that miserable taste in our mouths of being cheated and scorned.
They should have waited until at least January. But, I guess it's hard to see the forest through the trees when all you care about is the bottom line and a busy Christmas Season coming up.
Good Luck and Good Night.
http://www.apple.com/iphone/storecredit/