I'm With John Gruber
Yesterday, Steve Jobs announced a $200 drop in the price of the iPhone. Some people are claiming it's because it wasn't selling. Others are claiming it's unfair to the people that already bought one (although I'm still waiting for someone to claim the original price was "price gouging"!)
I'm with John Gruber:
Apple didn’t cut the price because demand is low — they set the debut price ridiculously high because demand was ridiculously high. I suspect that for the first few weeks, they were selling iPhones as fast as they could make them. Apple’s being aggressive, not defensive. (And for those of you who’ve already bought one and are pissed about the price cut, if you didn’t think the iPhone was worth $599, you shouldn’t have bought it. That’s how supply and demand works.)
Nicely put, John.
UPDATE: So, Steve Jobs has now said he'll refund $100 to existing iPhone owners. His open letter makes an excellent point, though:
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.
Comments (3)
James Tauber on Sept. 6, 2007:
The early adopters who are willing to pay a premium to get it earlier have probably all already bought the iPhone. So now they're pricing it for a more mainstream market.
My point is that seems an entirely reasonable pricing model and doesn't mean lower than expected demand. On the contrary, it means they accurately judged just how much *more* they could charge for the first couple of months to get the early adopters.
Zacca on June 5, 2008:
IS this the iPhone Gruber is dodging off at $55 in Australia?
So, you answer one sales pitches that pop up in your email folder.
You think about it and you decide to buy his product.
BUT here's the hook.
When you've paid your money, a pop up appears with the statement "Offer not available in your area".
The next part is the best a picture appears of two cell phones, the question is asked "Which phone is the Apple?"
If you are unfortunate to enough guess correctly you are shunted to the check-out and are left with a receipt for payment for phone you didn't want anyway.
As far as I know, the US Apple cell phone wouldn't work in Australia, I may be wrong, but I have perfectly good Samsung mobile.
So am I left with a $55 hole in my pocket or would someone take it for $100?
Ask John, because I'd love to talk to him.
PS: he must have a lot of these things, go ask him yourself :)
Zacca
Last Modified: Sept. 6, 2007
Author: James Tauber
Marko on Sept. 6, 2007:
I'm not. Obviously they wouldn't drop the price if demand wouldn't drop. I presume we can agree at least on that.
So question is only how much did it drop?
Since I can't for the life of me think of another occasion in recent memory where Apple would drop the price by 1/3 after a month, I'm pretty certain they did it because drop was somewhat bigger than expected.