Apple Pi**es Off One Million Customers

It rarely happens, but it did today...Apple made a PR mistake.

Steve Jobs just announced a $200 price cut on the 8G iPhone barely 10 weeks after its introduction. If I were a buyer of the iPhone at $599 when it launched, I'd be angry. We're all accustomed to price drops for new technologies, but this one is stunning. Especially since the media buildup to the iPhone was so unprecedented. I would imagine the core of the Apple faithful who stood in line for the first iPhones must be quite angry today.

The question is: will it have any negative impact given the overwhelming positives of today's iPod and iTunes announcements and the amazing good will Apple is enjoying.

The iPhone price drop also raises some other questions. Does this mean iPhone sales are not as strong as projected? Does it mean the initial price point was too high?

Of course, if you're not among the one million, you're probably thrilled you waited to buy an iPhone. And if you're an iPod customer, you're also thrilled that many iPhone features are now on an iPod.

And if you're an AAPL shareholder, you're probably happy that the iPhone is now an even more amazing proposition compared to RIMM or Palm. Holiday sales could go through the roof.

This will be interesting to watch.

Comments

[tsharble]

The whiney reaction of some portions of the Apple user base is one of the reasons why so many non-Apple followers hate all Apple users to begin with. Some of these angry folks are also truely sick in the head wanting to do bodily harm to Steve Jobs and be willing to end up in prison over this lousy $200 price cut (look on Appleinsider for this nutjob). I've also read the usual "I will boycott all Apple purchases from now on" threats. To that, I hope these idiots follow through because the Apple community would be better served without these sort of immature types.

What is even worse are the way some investors have been going on in a similar manner. Quite a lot of these folks have a decent paper profit (or realized gains from periodically taking profits) but they get bent out of shape by what amounts to be a drop in the bucket compared to those gains. To be that petty just wreaks and is truely disgusting. Me, I've been in AAPL for a decade now and I truely don't care that the price has dropped $200 from what I bought my iPhone's for because I have more than made up for it with the returns the stock has and will continue to provide in the future.

This doesn't mean I don't feel bad for some consumers who had to scrap and save every penny because they really honestly wanted an iPhone as soon as it came out but this is how things are in the consumer electronics space. You take your chances being the early adopter or the "gotta have it at all costs as soon as it goes on sale" type. Likewise, some Apple followers have been "trained" too well with Apple products having a so-called price premium (and therefore high resale value) which stick for long periods of time such that they've developed this "entitlement" complex. These same people also treat Apple as if they are owed something for their loyalty. I've personally spent over a $100k (USD) in Apple products since the early 90's and over a quarter million for the company I worked for yet my only expectations were for Apple to deliver products which worked as advertised and to provide quality customer service for those products. I never felt that Apple owed me anything like freebies, discounts, or refunds (if a price drop occurred outside the standard price protection window) yet I sometimes got those just because I never was a pest about it (like the way some folks are currently acting and clogging up Apple's retail and support lines screaming for compensation). These folks need to grow up and get a clue that Apple is a corporation, not a charity. This prevalent immature attitude is one reason why I tend to not take part in the online Apple communities because there are way too many irrational loonies who don't have a realistic view of anything outside the Apple space. This is yet another reason why Apple detractors view all Apple users as spolied brats because some of these folks do make the rest of us look bad by the way they act.

At least to me, Apple's aggressive pricing going into the holiday shopping season is going to be a positive for both consumers and investors in the longrun as Apple is going to make up the reduction in margin through volume. This will provide Apple even better economies of scale and more leveraging power with regards to the entire iPod/iTunes universe which itself will continue to attract more customers into Apple's higher margin Mac product line.

[John]

As a shareholder I think this is a brilliant move that bodes well for the stock. All the so called iPhone killers who are developing a response with the $600 price target in mind just got shell shocked.

As an iPhone owner at $600 I am slightly disappointed that I could have saved $200 bucks but nobody forced me to buy it. I am also encouraged by Apples clear desire to take the phone seriously and become a major player in the handset industry. In building a solid and broad customer base at the lower price point it will mean the that the software side of the phone will continue to be developed and updated with new features on a regular basis. It is hard to complain about a phone that will become even better than it was at the point of purchase.

[Bob Smith]

Exactly - those that have bought have bought.... now those sitting on the fence can get a big shove.

[dennis]

I emailed earlier and all I can say is there are those with too much disposable income that want the cool factor and will pay anything to have it.

Those who whine, here is a rule of thumb...

Think wait!

Oh, thanks for buying Apple, pushing the stock up and making me money

[D. Castle]

As much as I love Apple, I can tell you from experience that they have no sympathy for people who got caught by one of their announcements. They never apologize or compensate. I bought a new iMac online 10 HOURS before they announced that iLife 06 would be included on all new Mac purchases. They were unwilling to include it on my machine despite my documented years of being a loyal customer since 1982 and documented $60K of purchase both for my private use and institutional use for which I had purchasing power. Apple tends to act like a bunch of martinets in such instances. But, I still love their products, and I continue to buy them because of their quality and innovation.

[jpmist]

Count me in as pissed. I'm canceling the new bluetooth keyboard I ordered as spiteful vengence.

Siooma Steve Jobs, it's the refurb store for me from now on. . .

[DW Reid]

It seems to me that there are a lot MORE people excited than pissed off. What are those 1 million people going to do, stop using their iPhones?