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Apple fanboys burned by $200 price cuts.

What does Steve Jobs give in return for the hundreds of thousands of Apple fanboys who lined up and bought the iPhone eleven weeks ago? A $200 price cut to those who didn’t fall in line. Now, that’s a PR disaster Apple didn’t expect from yesterday’s announcement.

iPhoneLast June, Apple first introduced the iPhone at $599 for the 8GB model. Yesterday, Steve Jobs announced it’s going to discontinue the 4GB $499 model and the 8GB is cut down to $399. In just over 2 months, Apple dropped the iPhone price by almost 33%.

A lot of the people who lined up for hours last June felt betrayed despite their loyalty to Apple. Apple’s stock fell 5% on Wednesday and another 1.6% on Thursday to close at $134.63. Steve himself got hundreds of emails from customers who were obviously upset about the recent announcement.

I am sure that we are making the correct decision to lower the price of the 8GB iPhone from $599 to $399, and that now is the right time to do it. iPhone is a breakthrough product, and we have the chance to ‘go for it’ this holiday season. iPhone is so far ahead of the competition, and now it will be affordable by even more customers. It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone ‘tent’. We strongly believe the $399 price will help us do just that this holiday season.

I think spareparts for the iPhone didn’t just drop dramatically to warrant a $200 price cut. This means that when Apple announced the iPhone last June, it already knew it will be going for the $399 price after the initial $599. It is also possible that the iPhone sales didn’t meet Steve’s expectations and in order to reach their 1 Million target by December, they had to dramatically lower the retail price to push more sales of the unit. To think Apple is also getting 10% of all fees charged by AT&T to all iPhone subscribers, an arrangement/leverage no other cellphone manufacturer had in recent history.

Steve Jobs had to apologize and offered rebates to all previous iPhone owners:

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.

That, plus some $7 drop from the stock price has gotta hurt.

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Avatar for Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

12 Responses

  1. Avatar for Hailey Hailey says:

    The person above me gave you all the right answers. Cincinnati Bell is on the GSM network (as is T-Mobile, AT&T). You just have to insert your sim card and find your network in the settings>”

  2. Avatar for dhaz dhaz says:

    guztong guzto ko na magkaroon ng iphone!!!! plz contact me 092764*****!!! plz plz
    plz
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    plz!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  3. Avatar for anna anna says:

    san po pwede makabili ng unlocked na iphone?.. ung tig-10,000 lng ha.. please email me back for details kung meron na po.. o kahit po N73 na tig-10,000 nlng din..

  4. Avatar for MIKEl MIKEl says:

    ask ko lng kung san pee mag pa unlocked ng apple i phone dto sa pinas?? papabili sana ako sa US tpos dto ko pa unlock.

  5. Avatar for Jaypee Jaypee says:

    Most of the time, it’s always better to wait for a few months before buying a new type of gadget or device. A $200 price cutback is nasty and what makes it worse is how quick it was implemented.

  6. Avatar for BrianB BrianB says:

    Yeah,

    Steve Jobs has become “Even Steven” Cuts price on iPhone and introduces iTouch for the same price without calling. Nice article

  7. Avatar for elmer elmer says:

    that $200 is the cost of “pogi points” for early adapters.. price cut did not surprise me (specially for tech gadgets).. but it should have happen little bit later than sooner.. oh well i bought a 42″ lcd for 1.5K late last year and now the price is around 800 how i wish panasonic give me $ rebate too.

  8. Avatar for pinoymaclover pinoymaclover says:

    Here’s an interesting analysis on the price drop:
    http://www.bloggingstocks.com/2007/09/05/price-isn-t-right-on-iphone/

    Oh and apparently, there’s this other price drop that hasn’t been noticed much – the Zune just dropped by $50. Um… yey? :p

  9. Avatar for BrianB BrianB says:

    “That, plus some $7 drop from the stock price has gotta hurt.”

    Around December, Apple stocks are going to be $200. Most Apple stock holders are Apple fans, so it’s understandable why some would sell their stocks. Instinctively they feel it’s a bad move because they feel offended. But think how far a 400-dollar iPhone can go in today’s handset market. Very far indeed. I just wonder if there’s going to be a backlash from Apple fans when they start noticing even rednecks from North Dakota have iPhones.

  10. Avatar for BrianB BrianB says:

    You think Macs will get price cuts too? I’m waiting till just before Leopard is officialized before buying a Mac with OS X Tiger. Hope it’s pretty cheap by then.

  11. Avatar for BrianB BrianB says:

    Apple is going to feed on the carcass of Nokia, Samsung, SE, Motowho, et al.

  12. Avatar for quezacolt quezacolt says:

    makakabili narin ako pag may unlocked version n, yes! heheheheh

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