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Monday, September 10, 2007
When Apple CEO Steve Jobs announced that the 8GB iPhone was going to drop $200 in price, immediately, only 9 weeks after its initial release, I chuckled. “Figures,” I said out loud to my Cinema HD screen. And while we did post a story about the event with the subject line “Apple Shafts iPhone Early Adopters with $200 Price Break and Finally Releases an iPod That Can Hold All of My Music!“, truth is, that’s the business in the technology world. Early adopters have been “burned” by lower prices for decades. Talk to some old timers who purchased the first Apple II and they’ll all tell you stories of how soon after release, the price was lowered. Back to the phone analogy, let me remind you that nobody seemed to be too upset when the Motorola RAZR dove from the high five hundred field down to the mid-hundreds just a few months after its release. So why the hoopla on the iPhone?
Let’s look at it another way. The iPhone stirred the desires of so many that lines nationwide could be found at both AT&T and Apple Stores. Not just small lines, but lines that wrapped around blocks. News reporters up-and-down the street would liken it to a line of a super-star concert. And in a sense, this was a super-star concert. Having spent many nights on hard concert for a prime ticket at a concert in my college days, I can tell you that when I didn’t get front row…or even the front section, I was still happy that I even got a ticket at all! I think many could agree with the same statement when they walked out of the store with their iPhone on June 29th. That $200 “mark-up” was the fee we all paid to be of an elite crowd. The first to rock out with the iPhone crowd. And we rocked for two months. To me, well worth it.
Digging in deeper, let’s talk about the high approval rating of the iPhone. Never in the history of cellular phones has a device received such a high rating. Nearly everyone polled stated they would go back and do it all over to get the phone again if they had to. And this poll is only a few weeks old.
If any of you have used a Windows Mobile phone before, even for just a day, you’d be elated with the iPhone. With or without that $200 drop in price. I know I have been! In the 9 weeks I have had the iPhone, I have had two months of no irritation of frustration because of my phone. In fact, it has gone the distance and helped me in navigation when my dated GPS stirred me in the wrong direction. My Windows Mobile phone could have never been relied on for such a task.
The stability and quality of my iPhone has out shined even the more feature rich phones on the market. Why? Because it just works, stupid! Put another way, while Microsoft has been tinkering with its operating system since 1996 (Windows CE 1.0) to it’s latest update (Windows Mobile 6), which is nothing more than an eye-candy update (Mmm, much like Vista I guess), Apple did on its first try what Microsoft hasn’t been able to do in a decade: Make an outstanding smartphone/PDA. That, folks, is worth $200 to have it before the masses. It should be for you all as well.
September 10th, 2007 at 11:29
Pull your head out of Jobs’ ass.
September 10th, 2007 at 11:38
Amazing counter argument, Sebhelyesfarku! I’m curious where your head is.
September 10th, 2007 at 11:50
Sven’s got the right take. If you can’t afford the game, don’t play it. If you try to be someone you’re not (an early adopter, bleeding edger) then you’ll cry when you get hurt.
Don’t ask for fifteen minutes of fame, then pout when it’s over. If you want to be a forward-thinking risk taker, then enjoy the ride. If you want conservative, safe, guaranteed, protected experiences, then don’t stand at the front of the line and ask to go first.
Grow up.
September 10th, 2007 at 14:11
Good article. I’m sick of all the crybabies who can afford both the cash to spend $600 on a phone and the time to complain about it being too expensive, afterwards. I don’t care if Apple lowers the price to $1 tomorrow — you got what you judged to be worth what you paid at the time the market offered it to you — does it work as advertised? Then suck it up!!
September 10th, 2007 at 15:23
While I appreciate the $100 credit Apple doled out after the outrage, if it never came, I wouldn’t be too worried. The $200 I “wasted” definitely made me feel better than the beer I would’ve spent it on to feel good!
September 10th, 2007 at 18:20
iPod Release dates:
Oct, 2001 — $399, $499
July, 2002 — $399, $499, new features
April 2003 — $299 — $499, new features
July 2004 — $299 — $399, new features
Oct 2004 — $349 — $599, new features
Oct 2005 — $299 — $399, later in 2006 price drops by $50 – no new features
Oct 2007 — $249 — $359, new features
This release chart is what I looked at when I decided to be an early adopter of the iPhone. As this product line illustrates, Apple has normally taken about 8-12 months before a product line refresh or a price drop. This is the typical behavior that I anticipated with the iPhone. I figured that in the worst case scenario, it would be six months before a price drop, anticipating a 3G phone for Christmas. So it was worth it for me to get it earlier rather than wait 6-12 months for the next iteration.
But a 33% price drop in little over two months? Even in the electronic world, that is extremely RARE, your examples notwithstanding. You had to go back to the freakin Apple II before you could come up with the last time Apple did that.
Now I am a part of the newly minted sucker crowd. I have people coming out of the woodworks with a smirk on their face to tell me that the price just dropped. Apple, in one fell swoop, just created in the larger public’s eye a perception that the early adopters are chumps who could have waited a little while and saved a lot of money. The $200 is a PR issue, not an economic one. No one paying $600 for a phone is poor. But a company shouldn’t create an environment where people mock you for buying their product (even if the product is good). And I hope you don’t tell me not to care what people think. Such advice would ring false coming from someone who enjoys paying a fee to tell people that they are part of the “elite crowd.”
As for the satisfaction polls you are talking about, they were taken before the price drop. That same poll, post price drop, would show different results to “Would you have bought it so early?” question. I would guess that a lot of the early adopters would have waited the two months.
So no. $200 dollars wasn’t worth it.
September 10th, 2007 at 21:09
Right on, Sven. Like they say, “If you can’t take the heat, stay out of the kitchen.”
September 10th, 2007 at 22:02
To Neil,
This is the problem with the Apple price drop. It tells the early adopters to stay out of the kitchen. Those early adopters got Apple TONS of publicity. People lined up days before the product intro. People lined up out the door, around the block, blocked traffic, and in general, gave Apple tons of positive publicity. There was radio, newspaper and TV coverage for FREE.
If these people “stay out of the kitchen,” how do you create buzz for the next great thing coming out of Cupertino?
That’s why Apple issued a $100 apology. More PR and to get the early adopters back on their side.