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Thursday, September 06, 2007

I'd be a sour apple, too

Iphone Background here.

And to think I came this close to getting an iPhone two weeks ago...as a gift no less! (no, not a gift so I'd post about it). But I passed it up for the time being as I'm just not sure how much I'll use it and I have a long-standing beef with AT&T (and they become your carrier if you want the iPhone).

If you haven't used one yet they're just as cool as they look and it had me mesmerized for hours. It's genius in its look, feel and apps.

That said, I didn't even think to make a call from it ;-).

But I feel sooo badly for all those people I saw standing in line for the iPhone's premiere here at the NYC store. Sure, I can see a price drop to be more competitive with other offerings.

But in 6 months. Not 3. Wait, has it even been 3 months yet? Isn't it more like 2 months?

And $200 is a significant (!) drop in price. Ouch.

Due to its trove of enthusiasts, Apple needs to step far more lightly when it comes to caring for its early adopters and loyalists. Why? Because Apple is just not like other brands.

Or, maybe now it is.

Sorta kinda relevant: Whilst in San Francisco a few weeks back I went to the Apple Store. And you know what I couldn't understand? In their "theater area" there were a lot of people in seats talking apps back and forth but no one at the podium (they didn't have tutorial sessions scheduled for several hours). Ya know, like an Open Mike (Open Mac?) for users when tutorials aren't being held.

I asked a couple of the people why they didn't go up to the podium and share with the crowd what they were sharing with the people sitting adjacent to them. Just seems natural being it's The Share Economy. Plus, giving your enthusiasts a voice only makes them voice their love for you and your product even more.

The crowd thought it a great idea since they do that anyhow sitting in their seats. So I asked one of the store employees why they didn't let the users teach one another between sessions (surely users have new things to teach us, no?). He was very affable and said, "Huh, I don't know the answer to that question." So it sorta kinda killed the "Apple Store Experience" for me. Guess I like hearing from customers more than employees at the genius bar.

Update (couple hours later): Thanks to Neil for alerting me to this Open Letter from Steve Jobs...I understand they're going to give iPhone customers a $100 "store credit" but, with all honesty to readers, I'm running out the door and read it quickly so if it's a "rebate" then I agree with that. If, however, it's a store credit for future purchases, I don't agree with it (and I'm not sure how much one can get for $100 at the Apple Store, I would think it's a great way to get us to buy another iPod/etc.). I'll check back and read the fine print better; for now I just wanted to publish the link. And notice how Jobs hits on 'trust' in the letter...yep, trust is paramount (and it ain't worth losing over a few months of waiting to rollout, IMO).


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Ok. I need comment here. I bought the iPhone the morning of day 2 after waiting in line on opening day at an AT&T store which had only 20 phones anyway, and I was person 40. So the next morning I picked it up at an Apple Store and was first in line. Tada!!!

I love the phone. I also own a ton of shares in Apple (disclaimer). Am I pissed off about the price drop? Honestly, no because I love the phone. What is up with the strategy? I think Apple is going to introduce the next version of the iPhone at the $599 price point. It might access the more robust AT&T data network and have more disk space, more memory, more features, etc. I think this will be the supercharged iPhone and they need to make room for it in the price sequence. I'm predicting it here. And later I'll blog about it.

@Neil: Prediction noted ;-). What if they do introduce the next totally tricked-out phone at $599 in 4 months when you've spent that much (if not more) on one that's not nearly as fast/etc? Will that bug you?

This move just teaches early adopters and loyalists to wait it out (if waiting means but 10 weeks). They should have waited for x-mas season to drop the price, it gives enough "time" to avoid the angst and then they could slash the price along with the model you're talking. Just a thought.

For me, the biggest problem with the iPhone is the amount of memory. It's enough to replace your shuffle or nano, but not your full-on iPod.

When they get that down, I'll make the move.

"What if they do introduce the next totally tricked-out phone at $599 in 4 months when you've spent that much (if not more) on one that's not nearly as fast/etc? Will that bug you?"


My wife wants one now that the price has been reduced, but I want to hold out for the next model.

It was a brilliant PR move by Jobs. You blogged, we listened and realized we were wrong. Here's what we're doing to make it right. Classic crisis PR. Smoking!

CK, Apple just did what every phone manufacturers, suach as Nokia, Sony Ericsson, Motorola, did in the past: launch a phone for the early adopters, three months later drop the price, six months later turn the phone to the carriers shop and give it for free upon a subscription.
And on being an early adopters, well this is a sort of disease: you are born an early adopter, you pay a price for it, you are happy with this. At least most of the time.
What about you?

G might be right. I know a little about setting price points and this iPhone maneuver smells bad to me. It does appear that Apple is taking advantage (gouging) early adapters of every next-best gadget. And as long as those early adapters allow this to happen, they might (or might not) continue to get screwed.

I wrote at bizsolutionsplus about this from that point of view: Price Points are as much science as art and no one should every make a 40 percent error in pricing.

CK -

I agree with Neil. I waited in line on June 29 (http://rurl.org/8qj), and gladly paid the price for two 8G iPhones. I think the price was worth it -- I got to experience this fantastic product immediately, and haven't been dissapointed since (aside from an iPhoto link issue).

If Jobs wants to lower the price, that's his right. I don't feel ripped off. I got what I wanted: immediate access. So the $100 rebate is icing on the cake.

It boils down to product for me -- not PR, not pricing strategy or timing. The iPhone is amazing. It has made my work and life easier and more exciting. Enough said.

- Tim

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