We’re still on vacation, currently in Milwaukee, but we’re staying in a hotel that has free WiFi so I had to check in on what Apple announced yesterday.
If you haven’t heard, they announced a new line of iPods, a (limited) music store where you can buy iTunes tracks via your iPod’s / iPhone WiFi connection, and a lame system for buying custom ringtones for your iPhone.
You can watch the announcement here.
I’m going to gloss over all of this for now, and talk about the other announcement Apple made. They dropped the price on the 8GB iPhone to $399 (down from $599). They also discontinued the 4GB model, but they’ll be selling them for a reduced price of $299 (down from $499) while supplies last.
The price drop has stunned more than a few people, myself included. I can’t remember a time when Apple dropped the price by so much, so quickly after introducing a new product. As we all know, the iPhone was only introduced just over 2 months ago, on June 29th, 2007.
I personally am a little pissed off about this. After reading some other blogs and forums, it’s clear I’m not alone. This seems like a slap in the face for all of us who were willing to shell out the $599 (and wait in line on opening day) just two months ago.
On some of the other sites that I’ve been reading complaints, there have been others who basically call us whiners. They say things like, “you knew the price would go down eventually”, or “if you think $599 was too expensive you shouldn’t have bought it”, or “you paid the $200 for bragging rights”. To all of these things I say, BULL SHIT!
I am very happy with my iPhone, and I think it is worth $599. It’s not that they dropped the price that pisses me off, it’s the size of the price drop, and the fact that they only introduced the iPhone 2 months ago.
Based on Apple’s history, I expected that about 10 months after they introduced the iPhone, they would come out with a 2.0 model, that would cost $399-$449. Knowing that Mobil phones tend to drop in price faster than many products, at worst I expected a $100 price drop about 6 months after the launch. Either of these would have been perfectly acceptable. I wouldn’t be mad in the least. But, to drop the price almost in half just 2 moths after it launches is insulting.
I’ve also heard this situation compared to buying a G5 right before Apple announced the transition to Intel. I would say that this is not at all the same. The G5 was a long-standing product. If you happen to buy one right before the Intel announcement, that’s just bad timing. This is different because the iPhone is a brand new product.
I have a hard time believing that the market has changed so much in two months that Apple can drop prices this much and still maintain their margins. I find it more likely that Apple intentionally inflated prices for the first two months just incase the iPhone was a flop.
I think this kind of crap is ultimately going to hurt Apple. I think the next time they introduce a new product, the early adopters will be much more cautious about jumping in. They’ll say, I’ll just wait 2 months and see what happens.