So now that the speculation is over (and dare I say how correct the
rumors were) one good question was raised today about how entirely out
of character it was for Apple to cut the price of a current product
(in this case the iPhone) from $599 to $399. Was it panic? Were they
simply gouging the early adopters (such as me)?
I’d like to answer that. I think Apple had every intention or rolling
out the iPod touch around the same time as the iPhone and letting
users decide if they wanted a converged cell phone and iPod. But at
some point they got a little behind with the iPhone and had to take
some engineers off MacOS 10.5 to help. Now that iPod touch and others
are ready they can lower the price and align the products the way they
wanted. That said Apple must be kicking itself for sticking it to
their very important early adopters. If I were still at Apple I’d be
sceaming to make it right – at the very least a few free ringtones
would be nice. 9/6 UPDATE: Steve makes things right!
If you missed the keynote, here it is.
Sent from my iPhone
Steve- Great blog, I’ll definately put in on my must-read list. My question to you is Why didn’t Apple set the price at $399 initially for the 8MB instead of $599, esp. if thats what the intended all along…they could have avoided this potential embarassment. Could it be they intend to release a new higher end iPhone this year?
Apple has two masters – the Street (looking for revenue and unit growth) and it’s users (looking for a great product at a fair price.) I think the $599 pricepoint was fair given those factors and the cost at that time of buying an iPod and a phone separately. I paid $599 for my Samsung SPH-500 Palm smartphone 4 years ago and it was worth every penny because there was no competition. Now that Apple is undercutting the iPhone with the iPod touch they needed to fix the line. Again, I think they had a product timing relase issue and this was the best solution. I’m involved in lots of product marketing decisions that force you to make these types of trade offs daily and the important thing is to keep the user in mind. And I do think Apple keeps its users in mind – and Steve does read those emails. The message – (which most Apple customers already know) You picked a good company and we hear and value you.