Steve Jobs Apologizing for iPhone Price Drop? Come on!!

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“I’m sorry I made such a compelling product that you willingly parted with $599 for it…”

He didn’t say that, but he really should have. The early buyers that stood in long lines for the privilege of being the first to be seen with an iPhone apparently complained en masse about the rapid price drop. This prompted Steve Jobs to offer them a $100 Apple store credit and an apology.

Competitors and naysayers quickly jumped on the drop to point to a lack of interest in the product. What?!

Apple originally hoped to sell 1M of the devices in the year, at the rate they are going (and with the price drop) them might even double that! With the initial back-orders of the iPhone, people with an economics background would argue the price was still too low!! Yes, a lack of interest for a smart phone which beat all others in sales in July indeed…

I think anyone who thinks that the price drop is a sign of weakness in Apple is really missing the point. They managed to create their own version of the secret sauce that has made RIM’s BlackBerry such a success for that company. They have made their iPhone part of the service, instead of some throwaway appliance by Motorola or Nokia.

Did anyone notice that the deals they signed with 3 European carriers recently included a 10% kickback from revenue on wireless plans attached to the iPhone? That kind of recurring revenue would get me to put my product in the hands of as many people as possible as well.

The short term price drop will pay itself back in spades in recurring revenue, just watch.

As for the apology? Well, Steve Jobs understands it is much more important to have happy and (very) loyal customers than to be right…

If you follow my blog, you know I own Apple stock, so there is your full disclosure.


One Response

  1. […] About Adrian ← Steve Jobs Apologizing for iPhone Price Drop? Come on!! […]

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