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IPhone Price Cut Annoys Some

Mike Musgrove

Update: A letter penned by Apple chief executive Steve Jobs and posted to the company's Web site is apologizing to early iPhone buyers and promises that a $100 Apple store credit is on the way.

_ _ _ _ _ _ _

One of my colleagues was in an Apple store yesterday afternoon buying a new keyboard -- he tells me there were about a half-dozen iPhone owners trying to get a partial refund on the new, flashy device that got a sudden and unexpected price cut yesterday.

"They did not seem happy," he reports.

Many folks who rushed out early to buy the slick smartphone -- I bought the 8-gig model, for the record -- are a bit grumpy about having paid $600 for the new device that Apple has now discounted to $400. One early iPhone owner has started a site to keep track of the complaints and the blog sites where angry iPhone owners are weighing in on the surprise early adopter "tax" they just paid.

Here's a typical enough comment on Macworld's IPhone Central page: "I wouldn't feel so bad if it was a modest drop in price. But $200 on a $499 product is obscene. Apple clearly grossly overpriced its product. If Apple does nothing to address this, I say [to heck with] them. I switch to PC and won't care how bad Microsoft is."

My colleague Mr. Pegoraro points out this page on Apple's site that might be of interest to people who bought the device less than two weeks ago.

If you're among the group of annoyed early iPhone owners, please post a comment or drop me a line.

Or, feel free to gloat!

By Mike Musgrove  |  September 6, 2007; 12:13 PM ET  | Category:  Mike Musgrove
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What will sell more phones would be untying them from AT&T!

Posted by: WA2CHI | September 6, 2007 12:40 PM

Apple has 14 day price protection policy. Take your receipt back to the Apple Store and they will refund your credit card.

Posted by: DCGuy | September 6, 2007 12:43 PM

I already posted to the Apple site about the price cut, but the more posts that there are the better chance of Apple listening. I have had my phone for three weeks and I still love it, even though it costs a third less today then yesterday.
The AT&T store I bough it at has had many calls but is not overly sympathetic.
A small price cut would have been tolerable, but taking $200 off the price is a little harsh to the early buyers.

Posted by: Larry | September 6, 2007 12:46 PM

That is precisely why I wait a while before getting any "hot" gadget. It's inevitable that the price will drop and it pays to hold out a little longer.

I for one am waiting before I get an Xbox 360. I'm sure in another few months, the price will drop even further.

I will concede, though that this was a drastic reduction in price on the I phone in such a small segment of time.

Hopefully Apple will accomodate it's customers and this can be resolved.

Posted by: Gil | September 6, 2007 12:49 PM

I don't understand the hub-bub about all of this. Everyone knows NOT to get any electronic item when it first comes out unless you come from real money. I am still holding out for a bigger discount for the iPhone. Just as in the case of of the flat panel TVs. I couldn't afford their prices when the first arrived on the scene but now by Christmas, I will be able to afford my new flat panel tv.

Posted by: Ricanreporter | September 6, 2007 12:50 PM

While a $200 price cut within two months of introduction seems severe, I think that this is the price early adopters must be willing to pay if they want to have the coolest new gadget RIGHT NOW. What did people think was going to happen, especially when sales really slowed down soon after launch? I am a big Apple fan, but have a hard time feeling much sympathy for people who have had their iPhone more than a couple of weeks.

It is interesting to me that Apple seems to be the only technology company that is upfront about price changes and heavily touts new product releases. My suggestion is to stop wasting time on things that you cannot control and enjoy your iPhone, but make a mental note for when the next 'must have' toy comes on the market. After all, Nintendo still makes the Wii, right? All of the inventory did not simply dry up in the first 48 hours.

Posted by: Lester Burnham | September 6, 2007 12:53 PM

It's a little quick, sure, but prices drop. Prices always drop after a while, and early adopters of pretty much any technology pay more than people who wait a while.

Maybe they should have waited, especially now that the iTouch is coming out.

Posted by: Hilarious | September 6, 2007 12:55 PM

People, if you're an early adopter, you're going to pay a higher price and you're going to deal with all the bugs that get fixed later on. If you don't appreciate the price drops, DON'T BUY EARLY.

Further, if you bought within the last month but not within the last two weeks, check your credit cards policies WRT price guarantees. Many cards offer such guarantees, and while not as easy as walking into the Apple store with a receipt and walking out with $200 put back on your card, it's probably worth $200 for your trouble.

Posted by: Still love my Nokia and T-Mobile | September 6, 2007 1:08 PM

Are you actually SURPRISED?

Apple has ALWAYS intentionally overpriced their products because they know their cult followers will happily pay inflated prices. Once the nut-job followers have paid up, they drop the price to the rest of us.

The iphone is a superior device due to its clever use of voltage changes to drive the user interface, in lieu of pressure switches... But it is still overpriced as ALL APPLE PRODUCTS ARE WHEN LAUNCHED.

That inhibits sales. Not to mention being tied to AT&T like a bad rash...

You apple guys didn't know this already?

Posted by: JBE | September 6, 2007 1:14 PM

If you want to get the extra $$ you paid back then you have to present to apple a signed statement from all of the people you tried to impress with your new iPhone that they now feel that their initial comments were 33% too complimentary.

Posted by: kemurph | September 6, 2007 1:24 PM

I would be thrilled to have the phone even at the old price. I'm stuck in a nearly new contract with Verizon which will cost me too much to break. Any Iphone user out there want to take on my contract, and I'll pay you $200.


Yea, that's what I thought.

Posted by: jd | September 6, 2007 1:27 PM

As others have pointed out elsewhere, it wasn't the price drop per se. It was the timing. If Apple had announced the price drop at MacWorld in January, for example, I don't think anyone would be complaining. Actually, I would have been really surprised if they kept the $599 price longer than six months.

But a 33% price drop after only two months is rare for consumer electronics in general, and unheard of for Apple in particular. And whether or not you consider it to be reasonable, the fact is that hundreds of thousands of Apple's most loyal customers now feel cheated. Apple is not Lenovo; it needs these types of loyal customers in order to be successful.

Posted by: Dave | September 6, 2007 1:33 PM

How childish. You bought it the day it came out after standing on line for a couple of days. You knew what the price was, but you decided you would rather have the iPhone than $600.00. You were happy and Apple was happy.

Now you're not happy any more because you could have gotten it for a lot less by waiting a few weeks. And Apple is mean.

All I can think of is the whining little brat pestering his parents for a new toy. "No, Jimmy, you can have it for your birthday." "But I want it N-O-W-W-W-W-W!!!"

Grow up.

Posted by: BPSCG | September 6, 2007 1:53 PM

As far as the timing, we live in a fast age, so there being less time between initial rollout and first price drop should come as no surprise.

Apple clearly figures they'll make more money this holiday season at $399 than they will at $599 or even $499. More power to 'em.

Even if I liked the iPhone (I don't like putting my face against a touch screen) I will never knowingly support ATT/SBC in any way, shape or form ever again, so this was a bit of a no brainer for me.

Posted by: Speedy Gonzalez | September 6, 2007 1:56 PM

I've been helping people buy technology for 30 years. You will always get a better price on new technology if you can afford to wait. But you need to do the math and calculate what waiting will cost you. In many cases waiting gets you an item that was debugged by early adopters. Waiting always gets you more power/features for the same price as the original. Fashion or bragging rights should never be a part of a serious technology purchase. Apple blurs the line for young people and always profits from the style buyers.

Posted by: THW2001 | September 6, 2007 1:59 PM

Anyone who is that irritated about buying a product right before a price cut should only blame themselves for their greed and inability to wait for a price drop that would inevitably come. If you are irresponsible enough to believe that a phone/toy is well worth $600-$700, you deserve to wallow in your poor decision and have no one to blame but yourself. Apple's only responsibility as a business is to make products (+/- stand behind them - Apple has been good at this in my experience) and sell them for as much of a profit for themselves as the market will bear

Posted by: MJH in VA | September 6, 2007 2:07 PM

I am very annoyed with Apple on this -- they are gouging the early adopters here, and we're the ones they should be courting. I'm a Mac devotee but this does give me serious pause.

Posted by: KELT | September 6, 2007 2:09 PM

I don't feel that a purchase made on August 3rd makes me an early adopter at all, but yes, i did agree to pay 599 for it. It was worth it to me at the time, and my feelings haven't changed. I don't like it 200 dollars less. However, a 33% drop in price after having this thing less than a month stinks. I don't expect all my money back, i get it, but it would be nice if they made some sort of polite gesture to those of us outside of the 14 day window. Especially if it was purchased within a month of the new price. Maybe a free download from itunes or something...

Posted by: Brian | September 6, 2007 2:17 PM

I didn't buy one because this always happen. You buy a new car and drive it off the lot and you just lost 5k.

People, who are in IT like myself, realize that with any system, you NEVER buy it as soon as it's developed. It has bugs and once the supply and demand equal out, the price goes down. They want to sell this product to finance the new things they are working on.

They just came out with a new IPod also, I would have just gotten that. You have cell phones that cost 100 bucks with a discount that are a little tougher to use, but do the same job.

Technology advances quickly, people need to control their impulse buying.

And I saw a comment about buying a PC. I will NEVER buy a PC product again. Virus's and attacks always happen to those things1

Posted by: Dan | September 6, 2007 2:26 PM

It is simple economics. Apple had a supply that cost them a certain amount to develop and produce. They priced it where they could recoup their costs and make a profit (gasp!). There was a demand for the iPhone, and people were willing to pay the price.

In the theory of Supply and Demand, prices go down when the supply is too large (which is why some believe Apple cannot unload fast enough), when factors of the supply change (such as newer technologies, reduction in costs, recoup of R&D) or when demand decreases (could be true, who knows.)

The simple matter is, prices change. Something is only worth what the last person paid for it. If you felt you could only pay $400 on an iPhone you didn't have to buy one. No one forced early adopters at gun-point to shell out $600.

Posted by: John H | September 6, 2007 2:26 PM

One has to wonder at the acuity of consumers who are willing to drop $600 on a new phone, then deride the same product as woefully overpriced some weeks later. You didn't realize that when you bought it? I like to think of the whole thing as a stupid person tax. And even at $400 the iPhone is still waaaaay overpriced.

Posted by: rah | September 6, 2007 2:27 PM

They may be gouging early adopters, and why are they doing this? Simple, because they know people will pay a premium to have a hot new gadget as soon as it is released. Anyone who was willing to shell out $600 on Jun 29 did so on their own free well.

All of the early adopters would have been wise to consider the possibility that prices will drop in the near future. They paid a high opportunity cost, but that was their decision. I don't understand why this is so astounding to people. This is the cell phone market, Apple is trying to compete in a new market segment here. In the cell phone market prices start high and drop quickly because most products have a very short half life before the next revision comes out. Anyone comparing Apple's pricing decisions on the iPhone to their pricing on their mac hardware is not comparing apples to apples (no pun intended). Mac hardware typically has a longer half life and rarely sees price drops but rather hardware revisions. This is due to the nature of that market though. Cell phones are evolving much faster.

So, if you're in your 14 day window from Apple or 39 day window (as I understand it) from At&t, you can get the difference back under the price guarantee. But, anyone complaining outside that price guarantee window needs to take a step back and consider things a bit. It's technology, it evolves quickly, and to think prices on cell phones are going to be the same in two months is just silly.

Posted by: EarlyAdopter | September 6, 2007 2:33 PM

I can't stop laughing.
I saw these Bozos waiting in line to cough up $600 or more for a cell phone and I thought then, as now, that Apple would screw them. And so they did. And I'm sorry but they deserved it for being so incredibly gullible.

So excuse me while roll over laughing. Maybe next time all the Skippy McDummies will realize that letting corporate America control your wallet - not to mention your mind - is just plain insane.

Posted by: UplanderMom | September 6, 2007 2:33 PM

I purchased the iPhone just about one month ago. I'm extraordinarily irritated with yesterday's news. It was an expensive purchase to be a guinea pig for the product - I think the cut needs to be retroactive - full stop. I waited a month, then I bought, but yet I'm still out cold. This is my first Apple experience, and while the technology is cool --- never again.

Posted by: irritated | September 6, 2007 2:33 PM

It's economies of scale people. Econ 101. Prices drop as production increases. So, if you feel like you got burned, take this lesson and learn from it and don't buy something as soon as it is released next time.

Posted by: I love economics | September 6, 2007 2:35 PM

A 33% devaluation in a product in 60 days is not normal. Case in point, several credit card companies have complementary "price protection" programs for 90 days. Dell price matches itself for the first 30 days. If a 33% devaluation were commonplace neither credit card companies nor the largest PC manufacturer could afford these policies.

The iPhone was the no. 1 smartphone sold in July which is only due to the early adopters who helped build the buzz for this phone. News stations covered the iPhones release, clips of people waiting patiently in line then getting high-fives after purchasing their iPhone were streamed and watched immediately. Apple screwed up in their initial price estimates for the volume of sales they wanted to do and has screwed over it's most loyal customers. Whose going to be excited about an apple product launch now? This was a terrible PR move on Apple's part.

Posted by: igotiphowned | September 6, 2007 2:38 PM

I didn't get an iPhone for the following five reasons:

1) AT&T
2) The price
3) AT&T
4) AT&T
5) AT&T

Posted by: hyundai | September 6, 2007 2:40 PM

Poof! Your BMW 7 Series is now a Honda Accord.

Posted by: Chas | September 6, 2007 2:41 PM

and to think AT&T thought their brand name was better than Cingular! I think they would have done well to keep the Cingular name.

Posted by: Corp Branding is Dumb | September 6, 2007 2:41 PM

Everyone knew the price would come down. Those who decided to stand in line on Friday night and accomodate the ridiculous notion of "I have to have this first" should not be mad at their own shortsightedness and overzealous, irrational, consumerism.
I can think of nothing better to do on a Friday night besides standing in line, for of all things, a mass produced telephone.

Posted by: FTC | September 6, 2007 2:46 PM

If someone paid the $600 in the first place, one would hope that he thought it was reasonable. I'm sure Apple didn't coerce anyone into making a purchase.

There has always been a cost for being an early adopter. In this case that cost is $200.

Posted by: jw | September 6, 2007 2:47 PM

...listen to these bitter judgements from people who don't own iPhones! I bet you would be singing a different tune if you spent the money. And for the record, I purchased an iPhone, but I'm in no way "cool" and as I bought it 3+ weeks ago, I certainly did not stand in line. I don't own a video iPod and my PDA died. I've been with AT&T for yrs, it was a logical purcahse. What Apple is doing is just plain sh*&^y. And AT&T should be outraged, too. The provider is the one who has been handling all the complaints, all the billing problems, the class actions, while Apple acts like the immature Valley co. I always thought them to be. I made a mistake in buying an Apple phone, but now it's mine and I plan to use it. This is it, though. I'm thru with Apple, and I'll be sure to tell every single person who comes up and asks me how I like the phone that I hate it.

Posted by: Anonymous | September 6, 2007 2:48 PM

This is comical. Of course the iPhone was overpriced. Apple knows who its fans are. They're called "suckers" at corporate headquarters. Once the suckers were cleared out, they dropped the price to sell them to the rest of the world. If you don't like it, don't be a sucker.

Posted by: Derek | September 6, 2007 2:51 PM

Apple screwing their customers with price drops and secret product launches
is nothing new and has been around for at least 15 years.

When I first got into computers in the early 90s I had an ancient IBM PC, but
I wanted to buy a Mac. I waited and watched prices for months but ended up
getting a second PC as they were cheaper and offered more
upgrade/configuration options. About a month after I bought my PC around 1992
(a Gateway which was over $2500 for a 486 with a whopping 8MB of memory)
Apple cut their prices by almost 40% on the computer I was looking at (the
Mac IIvx) and introduced a new line of machines (the Quadras). There had been
no major press on this, was all secret (keep in mind this is before the era
of engadget/gizmodo/etc.). Needless to say I was so relieved I didn't buy a
Mac and have stayed away ever since.


Posted by: KLH | September 6, 2007 2:54 PM

I still can't afford one, so CRY ME A FREAKIN' RIVER. At least Apple is making good, fun products for which people are willing to pay outrageous prices.

Posted by: mobedda | September 6, 2007 3:30 PM

Suckers were willing to pay a premium to be one of the first to have it. From the size of the cut, I imagine it wasn't intended when the iPhone debuted. I'm sure Jobs and Co. would have loved to keep selling them at $600 for as long as possible, but someone must have convinced him that the price was inhibiting sales and that they'd make more money selling more for cheaper.

Posted by: aleks | September 6, 2007 3:33 PM

Okay, Steve Jobs is offering us a $100 credit for being early adopters. Keep in mind that Apple does not have to do this. So hopefully we can all stop whining now.

Posted by: We can all stop whining now | September 6, 2007 3:34 PM

I guess it sucks to be an early adopter!

Posted by: 22046 | September 6, 2007 3:34 PM

Well, that's life on the cutting edge! Early adopters were willing to pay $500 to $600 for their iPhones, and everybody I knew who got one gleefully showed me what it could do. Didn't seem to me that they felt ripped off back back then, so why all the bellyaching now when the inevitable price cuts arrive?

For me, that's just too high a price for a phone, no matter what other capabilities it might have. Don't count me as an early adopter, count me among "the rest of us."

Now that Steve Jobs has posted an open letter offering $100 store credit to iPhone owners, maybe the whiners can go back to happily playing with their toys again.

Posted by: Woochifer | September 6, 2007 3:37 PM

Several commenters have said it's simple economics... while it is, their points have been a bit off target.

The principles they have addressed have largely been those relating to open markets with commoditized products or at least products with multiple suppliers.

The iPhone, however, is more of a monopoly product. Yes, there are other smart phones out there, there is only one iPhone and only one maker of same. Therefore price is not dependent on where supply and demand curves meet. Instead, the monopolist is only interested in the demand curve and the cost of production/marketing. The monopolist sets the price high up on the demand curve and waits for all the buyers who are at that point or above to buy in. From there, the monopolist begins a stepwise process of reducing the price and waiting for the new buyers at each price point to run their course, until there is no profit left to be had or until the product is commoditized and falls into open market economics.

To those of you feeling like you've been had, here endeth the object lesson in the economics of monopolies.

Tomorrow we'll talk about monopsonies.

Posted by: Economics of Monopolies | September 6, 2007 3:38 PM

Were all these people in like asking for a refund on the emperor's clothes?

Consider the $200 premium a lemming tax for Apple fanboys. It's hilarious that these dolts who want to be so cutting edge and are willing to pay anything to be "that guy" are willing to go whine about a price drop.

News to nobody: This is Apple's MO. They have learned that they can juice most people on a really frequent release schedule. In this instance, they just roooned their fanboy base by burning them for $200. Fanboys will forget in a few months when the next titanium power iMac book pod phone comes out and they HAVE to have that.

Oh Hai, Apple's in ur wallit eeting ur moneyz.

Posted by: Analyst | September 6, 2007 3:39 PM

How many consumers were forced to purchase an iPhone? Everyone who bought one did so willingly, demonstrating that, for them, the phone was worth $600. After two months, Apple seems to have decided that $400 was a better price point, and adjusted it accordingly.

It's disappointing to see the price of something drop shortly after you bought it, but I'm not sure that Apple is under any obligation (outside of the 14-day price guarantee) to give people $200 to assuage their hurt feelings.

Posted by: oblio | September 6, 2007 3:39 PM

"...listen to these bitter judgements from people who don't own iPhones! I bet you would be singing a different tune if you spent the money."

That's kinda the point. We didn't spend the money because we figured we thought $600 for an iPhone was a bit of a ripoff.

Posted by: Not bitter, just a bit smug | September 6, 2007 3:42 PM

Being outraged a company dropped the price of a product you've already purchased borders on insanity.

The Motorola RazR initially retailed for $499. It now sells $100 or less throughout the country. Cell phones drop precipitously in price over time, more quickly than other "consumer electronics," and the I-Phone is now no exception. If you think Apple conspired to p*ss-off devoted Apple consumers, you're a lunatic.

To all the Microsoft-idealists: Microsoft has marginally lower profit margins per product, but not due to charity. Microsoft has a bloated bureaucracy, a mega-bloated R&D team, and huge "legacy" compatibility issues (= mega-bloated R&D team) that eat significantly into Profits.

To Apple-bashers: Rest assured, when Mirosoft launches the PC-Phone in 2008/2009, it will be as bug-free, user-friendly and virus-resistent as Windows ME, Internet Explorer and WMP!

Posted by: Miguel Pakalns | September 6, 2007 3:45 PM

"The Motorola RazR initially retailed for $499. It now sells $100 or less throughout the country."

Definitely less. I paid $80 for my wife's magenta RazR and that was before the $100 rebate.

Posted by: Cell Phones | September 6, 2007 3:51 PM

I really debated buying two iPhones (one for me and my wife) on July 31st. I am not normally one to jump on a hot product right after launch, but as a loyal Apple customer for years, I knew that their history on price cuts(see Macs,iPods, etc) and felt that, at best, Apple would most likely release a cheaper version of the current iPhone before the holiday rush (with less features). Sales were strong, analysts agreed that Apple should hit their target numbers, and I felt that the price on the 8GB iPhone would remain at or very near $599 for months to come.

Ouch. Looks like I guessed wrong. Do we love our iPhones? Yes. Were they worth paying an additional $200 apiece to use for a little over a month? No. Would I have waited if Apple would have had a history of lowering prices by 30%+ after launch on their products? Yes. Has such a drastic price decrease ever happened before on a popular Apple product just a few short months after launch? No. Even Steve Jobs admitted as much...

Posted by: TimH | September 6, 2007 3:51 PM

Instead of a price drop, a 160GB hard drive would have been nice. Or a screen to match the excellent Nokia N800 Linux internet tablet. Or a Psion Series 5MX type keyboard.

Posted by: OpenBSD | September 6, 2007 3:57 PM

Come on. Apple pulls this pricing-cut stunt EVERY YEAR. First time I caught it in the face was in 1990 WHEN I BOUGHT A MAC SE. That was $1200 up in smoke. They cut it to $899 five weeks after I bought it.

"Oh Hai, Apple's in ur wallit eeting ur moneyz."

Now THAT's funny. Save your money. Buy cheap phones unless your company pays for it. And keep repeating: GOO-GLE-PHONE. GOO-GLE-PHONE. GOO-GLE-PHONE.

Posted by: aaah-haaaa! | September 6, 2007 4:02 PM

It's a little unusual to have such a steep price drop such a short time after a new product was launched with no competing "better" product (e.g. a bigger or more capable and higher priced iPhone). Still, early adopters of technology usually pay a higher price for getting in first. This is just a pretty extreme case... extreme enough that Apple is apparently planning to provide $100 in store credit to anyone not eligible for any other refund:

which should take a bit of the sting out of the price change.

Posted by: Earth Watcher | September 6, 2007 4:02 PM

if Jobs and AT&T had the greatest idea of "Hey lets do the Iphone for AT&T and everyone will switch", they were wrong, Here Jobs was way way wrong. Even if i'd get the Iphone for free i wouldn't switch to AT&T. You can't take full advantage of the Iphone because AT&T network sucks, and they make billions of dollars and can't upgrade their network? what are they spending their money on? Advice to Mr. Jobs: if you want to make money of off it start a contract with Tmobile and Verizon. Why do you think Motorola rzor is a big hit. They didn't limit themselves to just one network. OH and mr APPLE. YOU AREN'T REALLY THINKING DIFFERENT.

Posted by: R3N3G4D3 | September 6, 2007 4:05 PM

In case someone missed the above link...

This is a great move on Steve's part. I am 100% happy with this action. I was not "angry" by the price drop, but i was miffed a little because i just bought it three weeks ago. This sure makes me feel warm and fuzzy. Happy customer is back!

Posted by: Brian | September 6, 2007 4:07 PM

unless you are a complete moron you HAD to know the IPhone was (and still is) overpriced and that a price cut was immiment.

Posted by: Anonymous | September 6, 2007 4:10 PM

And to all those who bought it early "IN YAH FACE"

Posted by: R3N3G4D3 | September 6, 2007 4:11 PM

OH and AT&T. i think you mean "AT&T the company with the biggest volume of drop calls" IN YA FACE

Posted by: R3N3G4D3 | September 6, 2007 4:14 PM

My cell phone literally cost 5 bucks. New. No contract, pay-as-you go plan. I cannot even fathom paying 120 times that amount because I cannot even conceive how any cellphone could possibly make 120 times better off. Some people must be insecure.

Posted by: joe | September 6, 2007 4:14 PM

whooo-whee...I guess we should be upset that PCs cost $3000 in 1985 and TI-10 calculators were $200 in 1975?...

Posted by: Anonymous | September 6, 2007 4:14 PM

whooo-whee...I guess we should be upset that PCs cost $3000 in 1985 and TI-10 calculators were $200 in 1975?...

Posted by: Anonymous | September 6, 2007 4:14 PM

And aren't all Apple products obviously overpriced?

Posted by: joe | September 6, 2007 4:15 PM

ahhh...I knew the losers standing on a line with their caps on backwards, smugly going on about being there the first day of the IPhone were going to get a comeuppance. All that grief and the albatross of AT&T? Puleeeaase...

Posted by: LABC | September 6, 2007 4:20 PM

Obviously, they weren't selling as quickly as Apple expected. The law of supply and demand does come into play here.

I think Apple made a big mistake by just going with AT&T as the carrier on this device. A good many people have a bad taste for AT&T because of some terrible mistakes that AT&T made regarding customer privacy a couple of years ago. The Apple / AT&T marriage was a bad one because many of Apple's most loyal customers are also politically active enough to know that boycotting a product or a service can send a powerful message.

I've had a bad taste in my mouth for AT&T ever since I read a book by Theodore Dreiser that was written in 1930. The book is titled "Tragic America". (I'm not taling about the earlier one by Dreiser called "An American Tragedy" - that's a different book altogether). And that was your great grandma's AT&T! Some things don't change much at all, do they? Tragic America indeed.

Some people do have long memories. I sure wish Dreiser were still around to write another book.

Posted by: Buck Batard | September 6, 2007 4:27 PM

I am glad I waited for the price cut as opposed to waiting hours in line like the lemmings all over the country (then try to "flip it" on eBay). Am I feeling a bit smug? No, I am feeling VERY smug; I don't have to have the "bleeding edge" of anyone's technology. I'll just wait til by cell phone contract expires 17 Oct . . . ;]

Posted by: meldupree | September 6, 2007 4:35 PM

An "Open Letter" to Steve Jobs:

Dear Steve,
As an apple stockholder, and a long time user of apple products for many years, I am very disappointed by some recent actions taken by Apple. 

On June 29th, less than three months ago, I purchased an iPhone. I paid $499 for the 4GB model. Just yesterday, I discovered that now, not even 90 days later, Apple has decided to discontinue the 4 GB model, lower the price to $299 for the remaining stock, and lower the price of the 8 GB model to $399, less than I paid for a 4 GB model.  I feel wronged and misled by Apple. Such a quick price reduction indicates that Apple pre-meditated this reduction before the initial release. Many of the customers who purchased the iPhone on it's release weekend were long time, loyal, Apple customers. I know that I am not the only customer who feels angry about this issue.

On another note, during recent calls to Apple sales and support, I sadly discovered that the quality of Apple's support seems to have degraded in the past year. Apple has been known for years for making high quality products, and standing behind them with excellent customer care and service. I spent over an hour and a half on the phone, and spoke to six different representatives, before getting an answer to a simple technical question about my iMac. I feel that the quality of Apple's support has gone from outstanding to un-acceptable.

The loyal Apple customers who purchased the iPhone at its initial release, waited in lines for hours and paid a premium price, feel taken advantage of. I feel that I should be reimbursed for the $200 more that I paid for my iPhone, or be given a free upgrade to an 8 GB model.  

I read your public response on to this issue, but I still feel that the solution you are offering is not adequate. As I mentioned, I would like to receive a free replacement or some kind of upgrade to the 8 GB model. I work in the technology field, and I am very aware that new products are release very quickly, but I also feel that Apple has not done anything like this in the past, and that this marketing strategy was, as I said before, planned from the beginning. I expect, and would greatly appreciate, a response to this letter.

Jake Kushner
President, JK Media

P.S. Feel free to post replies or email me at (! Thanks!

Posted by: Jake Kushner | September 6, 2007 4:38 PM

I thought that Apple was the 'cool' and 'hip' company. What happened?
Don't tell me they're just in it for the money.

Posted by: cduwel | September 6, 2007 4:39 PM

Yeah what you buy when you buy is the use of the gadget from the day you buy it to the day it is discounted to fifty percent of its original price. So if you buy a $500 iPhone and expect the same functionality to be available in a year at $300, then you're paying $200 for the use of the product over the next year. Personally, I don't buy Apple products. Just too slick for me. Sends the wrong message about me to others.

Posted by: blasmaic | September 6, 2007 4:45 PM

Man, Steve Jobs has let me down. Don't cave to the whiners, Steve! Anyone who couldn't see this coming is too dumb to operate a phone anyway. Seriously, it's both a cell phone ($300 today, $30 in a year) and a computer ($3000 today, $30 in 3 years). What did they expect?

Posted by: disappointed | September 6, 2007 4:59 PM

This event shows the difference between intelligence and wisdom. Intelligence by designing, and building the iPhone, Wisdom, or lack there of by cutting two hundred dollars off the price before its even a year old! I hope some Exec at Apple is walking his stuff to his car.

(Also are iPhones sitting because so many consumers are not happy with previous AT&T service?)

Posted by: Busdriver (never on cell) | September 6, 2007 5:21 PM

Jake Kushner, you slay me--that is hilarious!

Posted by: farstriker | September 6, 2007 5:22 PM

Dude, if you really are an Apple stockholder, you should be far more ticked off about this boneheaded idea to give all the whiny early adopters a $100 gift card for Apple stores than you should about the price dropping shortly after you jumped in too early.

Good grief people.

Posted by: Kusher's an Idiot | September 6, 2007 5:29 PM

If you stand in line to see the next episode of Star Wars, do you go and ask for $7.50 back when it ends up at the dollar theatre 2 months later?

Posted by: Where does it end? | September 6, 2007 5:33 PM

(Also are iPhones sitting because so many consumers are not happy with previous AT&T service?)

Posted by: Busdriver

I dunno. I throw my theory up because I think there's some merit to it. I don't use anything Apple, but most of the the people I know who do seem to be the folks who might just cringe at the idea of doing business with AT&T right now.

Posted by: Buck | September 6, 2007 5:39 PM

I demand they price it at cost! How dare they make a profit! How dare they benefit from economies of scale! How dare they price something high when the demand is high! I buy all the iStuff thus iStupid.

Posted by: iStupid | September 6, 2007 6:11 PM

Instead, I think all those early iPhonies should be paying the rest of us for being so publicly annoying for so long. I would vote to lift the ban on DDT temporarily in order to relieve us of all that "buzz" that's always in our face when Steve Gods announces another iDiot product.

Posted by: Terry1960 | September 6, 2007 6:25 PM

Are the people complaining about the drop in value of their iPhones the same flippers who made real estate unaffordable by acquiring multiple properties with subprime mortgages and now demand bailouts for their greed when prices fall?

Posted by: TS | September 6, 2007 7:54 PM

Suck it up early adopters. We should pay a premium for getting iPhones before the rest of the world...

Posted by: Anonymous | September 6, 2007 8:10 PM

everyone with any kind of sense or knowledge of the industry knew the iphone was overpriced. it's not just a matter of "early adopters", it's just that when you looked behind the flash, the features weren't there to justify the cost; and unless you were desperate to show off (or were fooled by the ads), you didn't need to buy this thing.

on a separate note, i know someone who's gone through 3 replacements for his iphone already. broken like eggshells.

Posted by: lollerz | September 6, 2007 10:12 PM

I wonder how many of my fellow early adopters said to themselves after owning an iphone for a week, "Gee, this thing really is not worth what I paid for it. I wish I could trade it in for something different." I feel so lucky I had enough money to buy one of these revolutionary devices. I love it, and have been saying since the day I started using it, the cell phone manufacturers should be ashamed of themselves. Snaked by a computer company.
I can't wait to use my $100 credit on Leopard.

Posted by: tomwjax | September 7, 2007 1:13 AM

"And I saw a comment about buying a PC. I will NEVER buy a PC product again. Virus's and attacks always happen to those things1"

Posted by: Dan | September 6, 2007 02:26 PM


I've had PCs since the late 80s, and I've been on the internet since 1997. I've never had a virus or malware. While it's not impossible for someone who is careful to be attacked, the odds are very slim if you are careful.

Oh, and I hate microsoft software but as a gamer Apples and Linux just don't cut it. And I never liked the way Apple charged so much and offered so little in the way of hardware variety. They remind me of Sony with all their proprietary crap.

Posted by: Robert | September 7, 2007 7:22 AM

I thought is was silly that so many people got themselves worked up over an unseen phone. Add the very large pricetag to that and it just tells me that Apple's got themselves a nice following of lemmings.

Fools for buying unproven products, and fools for paying too much.

Posted by: Kim | September 7, 2007 2:52 PM

Dear iPhone Friends!
(an Open Letter)

Congratulations, my early adopting iFanatics! First kid on your block to pay for your iPhone, and now first kid on your block to have paided $200 MORE for that iPhone. Betcha you're feeling a bit bummed out, especially since you're not even going to get a cash refund. Nope! Just that $100 credit. Which, undoubtedly, you will use towards the purchase of even MORE iCrap!

What has caused this fetishistic and "boutique" condition you so suffer from? (And I've worked with a number of you to know that it *IS* fetishistic - with bold italics on the "istic" part.) Will you be going out now to purchase that new iMonitor? (Er... new iMac...) Or, are you just too wedded to your nice G5? (Because in large part it's just too heavy to even lift - heavy like a iBoat anchor hard to lift - let alone to move?)

Do my fine iPhone Friends remember the 1985 Apple "Lemmings" commercial? You know, all the little lemmings falling off of the precipice; just business as usual? Strike you as a bit familiar, you buying anything and everything that Uncle Steve pushes? Have things come a full iCircle? Are the lemmings now YOU?

Posted by: iLemmings | September 7, 2007 10:03 PM

And BTW... What's with with the naming of all of the OS X versions? What's with the draining of the Big Cat pantheon? (Lions and Tigers, oh my! So FIERCE! And, before I start to bash my Apple three-percenting friends too much, it's worth noting that some of those kittens have CLAWS. Scratch! Scratch!)

Also, will somebody please tell Uncle Steve that he might want to avoid codenaming a subsequent OS X version "Cougar" - due to a certain connotation that could arise from the use of that Big Cat name? (Also Lynx and Minx, for the same reason...)

Posted by: iLemmings | September 7, 2007 10:34 PM

Sounds like i-phone has some i-rate customers.

Posted by: Mmmm, New technology. Must bite. | September 8, 2007 7:53 AM

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