Apple Gives $100 Store Credit To iPhone Customers

MooRogue writes "In an open letter to all iPhone customers, Steve Jobs responds to hundreds of emails from upset iPhone customers. Apple will be giving early adopters who are not receiving rebates or any other consideration $100 store credit at the Apple store. Details will be posted on the Apple website next week"

Woohoo!

I just found 1300 iPhones in a dumpster. That's $130,000!

Wow, that was quick

Say what you will, but what other company figurehead in recent memory has came out and apologized for other people's willingness to spend their money?

Maybe it was all planned out from the day one though, and if that's the case, I wish Steve would run for the next presidential election. Talk about planing for every contingency...

Re:Wow, that was quick

I'm pretty sure it was planned. There no way Steve and his entire management didn't expect that it would upset a lot of the early adopters. Now they sacrifice a bit of their $200 early adopter tax, but the benefits are numerous. The much more affordable $399 price tag gets in the news not one but twice. The $100 credit still remains in the company, and probably gets spent on even more Apple products, or on accessories which costs them almost nothing. After venting their rage for a day, many of the upset early adopters become even more loyal to the company than before. They get a lot of good PR for listening to their customers. People will be less wary of being an early adopter for Apple products in the future. And they after all this, the _still_ get to keep $100 of the early adopter tax.

This was brilliant marketing through and through. Bravo.

Re:Wow, that was quick

After venting their rage for a day, many of the upset early adopters become even more loyal to the company than before. They get a lot of good PR for listening to their customers.

Good point. I recall reading somewhere that people are more impressed by a company resolving a bad experience to their satisfaction than they are simply by good experience. (This is, of course, self-limiting. If every initial experience is bad, most people will stop slogging through repeated bad experiences to get to the good ones. Well, software .0 versions notwithstanding.)

Fan? Yes.

Yeah, but that $100 iTunes gift card (just to pick something) would still have cost ME $100, whatever their costs.

Secondarily, no one held a gun to our head and forced us to buy anything. Apple made an exceedingly cool product and we weighed the "cool" and utility against $600, made a decision, and bought it. They could just as easily spent millions making a technological flop like the Zune, in which case all of those R&D and marketing costs would have been a total write-off. They gambled and rolled the dice.

You may also notice that they made an Apple iPod HiFi dock... that just disappeared from the store. They made the AppleTV, which isn't exactly blowing off the shelves. In fact, I was just in a store yesterday and saw the new nano. Don't like the form factor, build quality, or the interface. So I'm not getting one, nor recommending them, nor buying them as gifts. Maybe other people will make the same decision and do the same. Maybe not. The point is that people don't buy EVERYTHING Apple makes just because it has their logo on it.

On the flip side, my MacBook Pro is the best notebook I've ever owned. OS X makes other most OS's look like they were designed by brain-dead committees (if that's not redundant). Aperture and Final Cut are some of the best tools on the planet. And if a truck rolled over my iPhone I'd be back in the store in a second buying a new one.

Fan? Yes. But I'm only a fan for as long as they continue to make great products.

If it was planned, why now?

Think about it - if this had really been planned, the best timing would be to announce the credit a week or two AFTER the new iPods go on sale. That way a lot of customers buy new iPods, then head back to the Apple store for accessories after they get the rebate. If Apple was as devious as people claim, issuing an announcement about a rebate ahead of the actual rebate is a terrible non-profix-maximizing idea.

Like everything else in life, the reality is probably between the two extremes - Apple probably thought recently about deep price cuts, and held in reserve the strategy of a rebate if complaints about the price drop from current owners were loud enough (which they were). Apple is a company yes, but Jobs is not a Ferengi (or Mother Teresa in a turtleneck).

Re:Wow, that was quick

A company that honestly admits they were ripping off early adopters by slashing the price $200 a month and a half later or a company that doesn't share that information.

I'm not sure how it was a ripoff. The price was clearly stated and the early adopters happily paid. Hell, they even stood in line for days to pay the original price. I always think of a ripoff as something not being worth what you paid. From what I've read, all the people who were early adopters love their phone and never complained about paying for it.

Re:Wow, that was quick

Look no further than the Wii. Nintendo could have easily charged $300 and still come in under its competitors while increasing margin, but they actually thought about it.

How about you look further than Wii. Of the top 3 consoles right now, Wii makes the highest margin of all three. That is, they make a margin >0, and PS3 and XBOX360 make margin 0.

The rest of your story is about the same quality as well.

I bought Nokia phone without sound, ringtones, color screen, or camera or anything at al, for $250 few years ago. Now I can't sell it for $10.

That's life, and Steve only gave the $100 credit because he pays for the fanbase he built, a minority of fanatics who believe that iPhone costed every single dollar of those $600 they paid. Look at the forums and you'll see fans sing praises about how Apple is much better than Dell since they use better parts and have better QA (which is funny since they use the same parts and have about the same QA). You'll see talk about design, and how good design is expensive to do.

They believed iPhone costed $600 hard dollars, and that would be so for a long time. They're now disillusioned since the imaginary value they purchased has just gotten 33% less.

And hence have two options : 1. learn something new, get less fanboyish, more cynical and continue your life; 2. turn against your idol and whine like a sissy.

Guess which was the easier one.

$600 and recoverable costs

a minority of fanatics who believe that iPhone costed every single dollar of those $600 they paid.

I'm not sure those people are wrong.

I've seen lots of stuff that focuses on the cost of the parts. These people seem to act like it was inevitable that if you dumped enough of the specified parts into a vat together that they'd eventually inevitably produce an iPhone.

I've only seen speculation about costs for manufacturing/assembly, software development, and hardware R&D. Probably because only Apple really knows. But I'm sure those costs are there. Perhaps others that aren't immediately obvious.

This isn't to say there wasn't a good margin built into the iPhone on top of that. However true it actually is that Apple actually is a damn smart company that is in fact driven as much by a desire to produce quality products as the desire to reap profits, it and its shareholders also probably desires to reap profits. They probably knew they could command the price of early adopters and many would pay it.

It's also possible that high price helped them recover development costs, and with that done, they're free to drop the price.

It's also possible the high price likely keeps it in the hands of people who want one so badly they're willing to overlook some Rev A problems.

It's also possible the price itself was intended as a quality/caché signal.

Re:Wow, that was quick

Bluntly? I don't even see why the price slashing is an issue.

That appliances and new hardware are way overpriced at market introduction is a given and (hopefully) known. Take an arbitrary graphics card. Compare its price at introduction and after 3 months. Now tell me that the company making them didn't "rip off" its early adopters by charging about 3-5 times what the card obviously (judged by the price after 3 months) costs.

You're not forced to buy it. There are many other models on the market, there is actually still some kind of competition between the manufacturers, so you do have a choice. You can settle for a smaller card for 3 months, then buy that superspecialawesome card and you still spend less. If you insist in having a certain piece of hardware before anyone else, pay the early adopter tax.

I did with the 8800, because I wanted it. I was well aware that the 600 bucks I spend on it are going to be "wasted" and half a year later, I get it for half the price. I wanted it now, and I paid, and that's how it is. Don't like it, don't buy it.

The same applies to the iPhone. Yes, it was overpriced at intorduction, and I hope everyone knew that. You want it? Ok, pay the price. But don't complain that 3 months later it costs a fraction, that's how the market works.

Now Apple does something nobody else ever did. They actually offer benefits to their early adopters and hand out freebies to them. Yet, people complain and lament, that it ain't enough and that they feel ripped off, and that they should give back money instead.

If I was Apple, the lesson learned would be to cease that kind of policy altogether and just let people sit there and fume. Hey, appearantly it's more acceptable than getting a rebate that's "not enough". At least I don't hear anyone complain to Intel, nVidia and all the other manufacturers who do essentially the same but do NOT offer anything to their early adopters.

waaaa i want my money back

wtf is wrong with these early adopters who complain about paying more? they knew from the beginning that apple will drop prices. whiney bunch of pussies

Re:next week....

... and send the request to Vastech, located on Bonaventura Drive in San Jose. [slashdot.org]

Re:Apple knows what you have

They don't even need the serial number. Had a problem with mine, a row on the touchscreen went dead. Called, and after going over my troubleshooting steps (reset, reset-all, re-install firmware), within 5 minutes the tech (who spoke English and seemed to be in the same country I am) agreed "Yup, it's broken. Sorry about that. What's your phone number?"

Next morning FedEX dropped off a loaner (free). Two days after that my phone had been replaced with a brand new (by appearances and packaging) iPhone. Total cost to me: 0. Total time between calling Apple support and having a fully functional iPhone: about 12 hours. Time spent on the phone? 10 minutes, max.

They do support well. People who say "Meh...it's just a phone" are the same type who see a luxury car and say "Meh...my yugo gets me to work just fine".

Just be sure credit not handled by Vastech

The dumpster hungers.

So What? Still good for me.

It doesn't matter to me what Apple's costs are, it's still something $100 cheaper to me. I plan to use it on Leopard which I was going to buy anyway, as I'm sure a lot of people will - how is that not a direct and pure loss for Apple since every dollar of purchase went to paying off R&D on the new OS?

Some things might go for things Apple paid less for, but I just call that Win-Win. Since Apple didn't have to do anything, something is way better than nothing.

How will Apple stay in bussiness?

If everyone that purchased an iPhone, goes out and purchases an iTouch for $100 less, how will Apple ever make any money?

$100.00 credit is NOT $100.00

No one has mentioned it but it is a great move by Jobs, $100.00 "Apple Store Credit" probably costs them $40.00 and in addition it is that incentive mentioned earlier. So,in no way does it cost Apple 100.00 to look like they are meeting Joe "early adopter" halfway.

Re:$100.00 credit is NOT $100.00

$40, except half the people wont claim it at all. And of those that do, how many will buy something that costs a hell of a lot more than $100? I bet apple profits off this.

Steve Jobs can't even fucking give away money without making money.

Meet Joe Whiner

So,in no way does it cost Apple 100.00 to look like they are meeting Joe "early adopter" halfway.

What I don't understand is why they have to meet him at all. He waited out in front of the store all night, he bought something he knew would soon be subject to steep discounts, and he did it just because he had to have this new toy 5 minutes before everybody else. And now he's screaming that he got ripped of because Apple only waited a couple months before cutting the SRP? A price nobody pays anyway?

Me, I'm against Global Warming and Global Whining.

Apple's open letter

Really? Steve sat down and personally read hundreds of emails that all boiled down to "I paid $200 more than I could have so you suck."? Really? You don't think that after 35 or so he'd have gotten the idea?

(My GF's response when I showed her the article)

Whiners

Years ago, when the HP LaserJet 4 first came out, I bought one at Fry's for $1600. Three weeks later, they were selling it for $1200. I didn't whine.

Who hasn't bought a computer, a flat screen tv, or a car where there wasn't a discount or price reduction a few months later? Why would anyone expect the iPhone to be exempt from economics?

Clearly, Apple is doing the right thing as far a public relations are concerned, but the idea that you are entitled to a refund for something you bought two months ago is ridiculous.

How to make a fanatic fan

1. Sell him something
2. Kick him in the balls
3. Wait till he complains and declares to hate you
4. Give him a band aid and a lollipop
5. He now loves the big brother again

I'm myself bordering the state of Apple fan boy, but this is scary. People crying fool yesterday now praise the company for being responsive. I'm not into conspiracy theories, but if Apple had had this planed, this would be pure genius. Lowering the price and then getting the people who payed more to cheer you. Just scary how perfectly they play their crowd.

I don't think this was planed. But I think Apple knows that we now live in an attention society and that people highly regard companies who admit errors and change. In fact people overvalue this since they do not expect it (yet. Microsoft will obviously copy it someday). They did it with "greener Apple", they do it again with credits for iPhones which will generate more money for them due to people buying stuff in the Apple store.

Re:How to make a fanatic fan

The price cut was planned but not for the reasons analysts are speculating.

The price cut was to compete with its own product, the iPod. The goal is to convert iPod users into iPhone users. And really, at that price why not? People are used to paying $200-$300 for their iPod, so the iPhone now looks like a very good bargain.

With that, apple adds revenue streams from ATT, even better integration with the iTMS, and the opportunity for even more revenue streams through new WiFi/Edge services (Starbucks, Ringtones, etc). Freakin' Brilliant.

I've just gained some respect for Steve Jobs

Certainly not the normal "Please piss off, and have a nice day." response of:

"We're sorry to hear of your disappointment with our product.
  Unfortunately, we have a very large volume of customers who
  are very satisfied with our products, at the the prices
  we offer. We do our best to please every customer"

.

Bad Move

This just encourages whiners and the worst kind of whiners. The people up in arms about this are not the people who were unwilling to pay $200 more. Clearly, they bought the phone at that price. What they are up in arms about is that a cheaper phone may mean that other people will be able to afford them, therefore their status symbol is not as exclusive and their feeling of superiority is diminished. The rebate doesn't solve this problem at all and will not please them anyway.

Psychology aside, from a business perspective, there's absolutely no justification for Apple to give a retroactive discount past the return period (see below). When you buy something, you buy it for a price at a particular point in time. If you want to wait and see if the price will go down, you may do so. If it's worth it at the set price at that time and you buy it, short of manufacturing defect, you have absolutely no claim that you should later get it at a lower price. It violates the social contract to demand otherwise. Would if Apple said you should pay them $200 more for the phone you already bought?

The only reason that some merchants have retroactive prices is that the product is still within its return period and it's not worth processing all the returns as people re-buy the product. This is the only case where it makes any business sense to retroactively price a product like this.

eBayers the worst kind of suckers

So they bought their phone on eBay, 'cause they were all out, or 'cause they got it for $559 ("cheapest price on the Internet!"). Now they have no recourse to "their $100" and just to rub salt in the wound, the guy who bought it at the store gets another $100.

Or, the guys all trying to sell the iPhones for $559 just had "their market" bottom out. To sell, they have to get price-competitive. There's a $100 pantsing they have to suffer.

Whoops! Speculation has its price!

Re:squirt...

There are Zune owners?

American Express...

I bought my iPhone on my American Express Card.
I called their dispute claim number at 1-800-297-8019.
They said they would process the claim for my 200 bucks.
No guarantees, but they will let me know if I get a refund through them.

Worth a try if you bought on a credit card.

An open letter to Steve Jobs

Hey Steve,

I'm pissed. I didn't buy an iPhone because I was waiting for the price to drop. And, now your'e refunding a big part of the price cut.

  I missed out on all the ohs and ahs of showing one off. You owe me big time.

Re:An open letter to Steve Jobs

I'm with you. Let's all mail Steve and see if we can get a $50 credit to compensate for the $100 savings that he stole from us.

Man Apple must be worried about the iPhone...

They must be worried about the iPhone in order to do something as crazy as that. Dropping the price of the phone 2 months after it's released by 33%? It's bad for several reasons but mainly because it pisses off the early adopters big time as evidenced by the emails/rebate. The $100 will appease them, however, they will be extremely gunshy to jump on the boat again, that's for sure. One of my friends who bought the iPhone said exactly that, he will wait a few months now and won't be fooled by Apple a second time.

And they know all this because they are savvy business people at Apple. Compare the iPhone to the PS3. More people bought the iPhone than did PS3 at the same price, yet it took Sony 1 year to get a $100 price drop as opposed to Apple's price drop.

So the only reason to me is that it's desperation. I'm guessing that report about how only 136k people actually signed up must have them pretty worried and they need to reach a critical level sooner.

Me personally, I smell blood in the water. I'm waiting for the price to drop even further before I begin to consider buying it. It would be interesting to see how many people feel the same way and if that will actually curtail pickup of the iPhone until closer to Christmas.

It was overpriced when it came out

Why should people expect rebates if they willingly buy some stuff that's overpriced and it gets cheaper a few months later?

If it was faulty or you got less than what was advertised then sure.

WRT rebates for punishing companies, I personally don't think fines/rebates are that effective. Bosses being sent to prison is definitely more effective...

I don't think a price cut is wrong

I think they realized that they had set the opening price a little too high. If the top end had sold for $499, they would have sold more at the opening, and then nobody would have objected to $100 price cut. What do the early adopters think, they bought real estate instead of a rapidly-devaluating piece of personal electronics? A $200 drop, so soon, made the upper classes feel ripped off, instead of bravely paying off the development costs for the rest of us. Show a little damn noblesse oblige, iPhone nobility. Keep paying the premium price for your phones, so they can lower the price to $299, at which point, I bite. The lower classes will thank you brave price pioneers. Scratch me behind the ear and I will tug my forelock for you. No, it doesn't mean that. The forelock is the little tuft of hair in the front of your head that the serfs would tug at to show obeisance.

This was clever

Instead of the story being "Apple lowers price, because of dismal sales", the story is about how people who paid too much are pissed and are getting a rebate.

Maybe when it hits $200 and works with t-mobile out of the box, I'll consider buying one.

Re:Why not $200 store credit?

How can you "lose" $100? Does Steve Jobs mug you on the street? You paid $599 for a working product, end of story. Early adopters pay out the nose for bragging rights, film at 11.

Re:Why not $200 store credit?

What I find annoying about Apple pricing (or rather "potentially" annoying, as I'm not one of their customers) is the centralized, tightly controlled pricing, combined with a strategy of infrequent price changes. The cost of a flashy new CPU or videocard will start high but drop steadily day by day (with some fluctuation). With Apple, they keep their cards close to their chest and then Wham! the thing you bought yesterday depreciates 30% overnight. It's perfectly reasonable for customers to be annoyed by this, because it's Apple's secrecy and pricing strategy that create the problem.

Re:Why not $200 store credit?

What I find annoying about Apple pricing (or rather "potentially" annoying, as I'm not one of their customers) is the centralized, tightly controlled pricing, combined with a strategy of infrequent price changes.

That's not different from a lot of high-ticket consumer products. Want to by a new Lexus from the dealership, or a tailored suit, you'll find the pricing just as foggy. If you want to buy a computer priced like gasoline, buy a Dell, but they're just as weird and capricious about their prices, they just hide their actual price in a vast system of rebates. Apple's pricing is also supposed to be simple to make their market segmentation simple. If I'm looking for a cheap iPod, it's easy to see which one's for me and compare it (well, not as easy as it has been, but still). I don't have to wade through four or five different lines with different price levels, rebate options, compatibility, capabilites, form factors, etc... There's both a downside and an upside to going with a single vendor.

With Apple, they keep their cards close to their chest and then Wham! the thing you bought yesterday depreciates 30% overnight.

I know you picked that number off a tree, but just about any computer (or car, or expensive resellable item, for that matter) depreciates 30% the moment you take it out of the store. I would also direct you to eBay to compare the relative resale values of 2 year old Macs, compared to 2 year old Dells or ThinkPads.

used market for cell phones and ipods

That's an interesting observation. I've seen a lot of people give their used cell phones to shelters, or to students or friends. I think the "market" for them exists, but its lubricated more by social currency rather than dollars.

Re:Why not $200 store credit?

Apple structures their prices in this manner so that people do not wait to they purchase products. This is also the reason they do not engage in price trickery (different prices for different verticals for no reason, arbitrary, limited-time rebates).

In practice, as long as I've been following these things, I have not seen the actual prices change muchh. The units get upgraded and the prices stay the same. Therefore, while it is true to say that your unit is worth less, it is difficult to make a direct dollar comparison. You just get more for your money - sometimes incrementally, sometimes radically. In this case, well, they probably weren't selling as many units as they wanted, or figured they were losing points with the demographic that made the iPod famous because of the outrageous prices.

The only other area I've noticed with radical price drops was the monitors. There are good reasons to lower their prices. For one, they have price competition from other companies who are making very similar or identical products, and it's harder to push the idea that a monitor worth just more for being Apple. Secondly, the iMacs are so cheap, and the desktops so expensive, that the potential market for the monitors is much smaller.

It's all because of the iPod touch

Usually when Apple announces something like this in a special event they get tons of free press describing their new product becuase their events are interesting enough to be news. Just look at the recent iMac announcement and the articles on cnn.com and other places. But now what made the news was this price drop that was uncharacteristic for Apple and how the drop made the early adopters mad and how it must be a sign that their not selling enough iPods. All this and barely a mention of the iPod touch outside of the tech websites like ars....

But C'mon the iPod touch is freakin' cool, and way more newsworthy than the iMac. The Steve really f*cked up by announcing the price drop at the same time as the iPod touch. This $100 rebate is his effort to try an recover from this and hopefully get some positive press.

Yeah, the rebate is good customer relations and preserves the brand... but I think the main benefit is in squashing the 'disgruntaled iPhone people' meme before it got out of control.

I'm not saying this to be critical of his motives, but to admire him for doing a good job protecting shareholder value. As a little-guy shareholder I am really greatful that he works so hard to protect my investment's value even though most of his personal wealth comes from his other business (Disney/Pixar). This rebate is really good (and timely) damage control. Next step: he has to give Pouge and Mossburg free iPod touches :)

$200 (real $) for 2 weeks - standard Apple policy

http://www.apple.com/legal/sales_policies/retail_u s.html [apple.com]

Should Apple reduce its price on any Apple-branded product within fourteen (14) calendar days of the date of purchase, you may request a refund of the difference between the price paid and the current selling price. An original purchase receipt is required, and you must request your refund within fourteen (14) calendar days of the price reduction.

Getting there first

Early adopters pay out the nose for bragging rights, film at 11.

When the iPhone launched, it sold out at both the nearby Apple Stores. If you weren't in line on Friday, you couldn't get one on Saturday. One of my co-workers waited until the middle of the next week, called a couple of stores to check inventory, and just walked right in and bought one.

Those people standing in line weren't just standing in line to get an iPhone. If that's all they wanted, they could have waited a week or two for the second shipment to arrive. What they stood in line for was the opportunity to have it first. They "paid" extra by waiting around for several hours when they could have been doing something else so they could get an iPhone before anyone else did.

Whatever the motivation -- bragging rights, enthusiasm, impatience, etc. -- there is a cost to getting there first. Conversely, there is an opportunity cost to biding one's time: Anyone who waited for the price to come down has gone the last few months with no iPhone.

Re:Getting there first

This is a good point actually. Armchair economist-type people were wondering why Apple didn't charge more at launch since they clearly could not handle that first weekend of demand.

Hopefully these aren't the same people demanding a refund.

Re:Why not $200 store credit?

Why is everyone up in arms about this. When any other company comes out with something cool and must have, people will pay more the 200% the retail price to get it on eBay.

Apple just beat the scalpers at their own game.

Re:Why not $200 store credit?

They didn't "lose" anything. That is just the price you pay for having it a few months before people are willing to wait. If your stupid enough to waste $600 or so on a phone, it your own fault.

Re:Why not $200 store credit?

Telling a bunch of geeks that they're morons for buying tech gadgets on a site specifically targeting the people who would purchase those items just seems...moronic. Or did you forget to click AC?

Re:Why not $200 store credit?

I take it you don't meta mod very often. You'd be amazed at the crap that gets modded insightful, or how many informative posts get modded troll. Give it a try sometime. [slashdot.org]

Re:if you pay even less for a contract-locked phon

I see the mental retards that spent small fortunes on a stupid web-surfing phone are feeling a little inadequate, but rather than looking the mirror to look at the half-wit really responsible, they like to blame those that point out the severe lack of intelligence they exhibit with their pathetic Apple groupthinking mindfucking ways.

I laugh at you, sir. You're a sad, sad human being.

Have you considered that are people for whom $400 isn't a small fortune? You can mock people for making a good living if you want, but it seems kind of ineffective.

"You have a lot of money and can afford nice things, you LOSER!" doesn't have quite the sting you seem to think it does.

Re:Why not $200 store credit?

Fuck you broke asshole

Hmmm... I'm trying to decipher this. Is English not your first language? Are you saying there's something with my anatomy? Are you saying someone should copulate with me until I cease to function?

Re:Why not $200 store credit?

It's not just a phone, so it's hard to evaluate the price. Early customers thought they could trust Apple about the fact that the iPhone was worth $600. Now they lost their trust in Apple, and Steve Jobs is trying to buy it back.

There's nothing here to trust--the iPhone was, in fact, worth $600 on June 29, as evidenced by the throngs who paid $600 after waiting in line for hours. If it wasn't worth $600, people wouldn't have bought it, or would have quickly realized it wasn't worth the price and returned it.

An item will sell for exactly what both parties (seller and buyer) believe is a fair price at the time of sale. Those that claimed that they got ripped off are just complaining that they fell for the "early adopter" technolust that comes with the launch of a new gadget. Instead, we should be cheering on those who couldn't afford one before but can do so now; "Hey, good for you! You're getting a deal!" instead of "Oh screw Apple, they let me buy something on my own free will at a higher price! Maybe I can join up with those non-user-replaceable-battery whiners and bitch about my lack of self-control and impulse buying."

And for the record, I paid $600 in early July, and feel that it was worth the price I paid. Mind you, if somebody wants to give me some form of credit after the fact, I won't turn it down, but I won't bitch about being allowed to spend my money on my own free will, either.

Shhh...

An item will sell for exactly what both parties (seller and buyer) believe is a fair price at the time of sale.

Please refrain from introducing basic economic concepts into this discussion. You could start a dangerous trend.

But seriously, for priding ourselves on our supposedly rational behavior, geeks can often be just as irrational as anyone else.

Re:Why not $200 store credit?

I'm with you on this one.

I bought two: an 8gb for myself and a 4gb for the wife, and we stood in line on opening day.

I honestly believe that the phones were worth every penny that we paid for both of them ($499/$599 retail).

For the record, my wife let her phone slip while she was walking out of her parking garage, and smacked it at the pavement while flailing to catch it. The sleep/wake button got jammed inside the buckled aluminum, and we had to bring the phone in for service.

Apple took the phone back, offered us a loaner ($25ish, IIRC... we didn't take it), and had a *brand*new*phone* shipped to us the very next morning. Priority overnight Fedex, 7:45am, I might add. For a phone that my wife admitted to beating up and was ready to pay for repairs.

So, that was two weeks ago, now Apple offers us $100 apiece for being early adopters.

You just don't get that kind of service in the technology industry anywhere else these days that I've experienced.

I mean, I bought a Vista OEM copy and an nVidia "Vista Ready" mobo on launch day (it's my job to know how to support *everything*, turd or not). You don't see MS or nVidia offering to make things right because little things like on-board sound and networking don't function...at all...nVidia passes the buck to MS, and MS passes the buck to nVidia, and eight months later now, I still have to use USB dongles on that particular mobo for sound and ethernet. And neither of those companies have any intention of making things right. And that's just driver issues. Let's not even get into Vista quality (utter pile of refuse, kthanxbye). No rebate, no exchange for something that actually functions as described. Not even an option to downgrade to XP from MS.

Anyhow, I contrast that experience with something like buying my iPhone, Macbook Pro or any of the dozens of other Apple products I've purchased over the years and there's just no comparison. The iPhone is a *killer* product, and they're going to gain a ton more goodwill out of a gesture that they didn't have to make.

Long story short, the wife is now an absolutely fanatical Apple supporter just from these experiences.

Blogging Whiners are whining because they paid a premium to be an early adopter? Well, duh. I had no illusions that it wouldn't be substantially cheaper by EU launch or the holidays.

Reminds me of a T-shirt I saw recently [pennyarcademerch.com].

--d

Re:Why not $200 store credit?

> Now they lost their trust in Apple, and Steve Jobs is trying to buy it back.

No, there is some PR aspects to this deal but Apple didn't need to do this. It's a way to make sure they keep happy customers [...] tossing half the price cut back to every buyer and the full difference to everyone who bought in the last two weeks is just high class.

Indeed. I'm often shocked by how much more open hostility there is on Slashdot toward organizations that try to treat their customers well. Google is constantly accused of being "evil" for ... well, for anything they do. Apple is slammed whenever they produce a new gadget. IBM can't give away enough patents to the open source community to let people give them the time of day. AMD releases specs for the ATI cards after less than a year of owning the company, and people have the gall to complain that it took too long.

Over and over we see the same thing. Companies that do right by the community are attacked. Cutthroat and downright evil companies that just ignore us (G.E. comes to mind) are ignored in turn. We're training the corporate world to do us no favors.

Re:Why not $200 store credit?

Trust is a very hard thing to earn amongst geeks. Ok this is way offtopic, but anyways.. I believe a lot of it comes from our social environment - we get beat up in schools as a kid, growing up the local bully would trick us into doing something foolish at our own expense and their entertainment (from our innate desire to 'fit in', so to speak), even so far getting trolled by our own kind in various outlets (getting PKed from people you considered 'friends,' or being goatse.cx'd), or being victims of various exploitations (at work, at love, etc). Growing up in that kind of environment, at times when I see a genuine gesture of grace, I can't believe it for a minute, and my head is spinning thinking of all the possibilities and reasons of why someone would do such a thing, likely at my expense nonetheless. Maybe it's just the nature of geeks to think ahead, *shrug* I don't know.

But in any case, it will come as second nature to us to be distrustful. Sometimes that manifests prematurely - perhaps the sales of the iphone are worse than expected and Jobs is trying to boost sales in order to look good in front of the other cellphone carriers - I could be thinking. Or perhaps: sales really did go well early on, but they noticed a sharp drop after the first month because they priced themselves out of the sweetspot (coupled with the whole ATT bundling push fiasco). A PR maneuver like this could bring forth a few more customers, maybe. Or maybe this was planned from the start, and luckily their supplier had better than expected yields for hardware parts and Apple took that to their advantage in order to get a jump on more marketshare against the other cellphone manufacturers (at the same time looking good towards consumers and not looking like total price-gouging capitalists which any true-blue american company in the business of cellphones is so well known for). Who the hell knows? Perhaps the cellphone carriers looking to take advantage of apple forced apple to price their units high (perhaps with aid from other manufacturers that had stake at the carriers, like clique'y capitalism), so Apple played the game according to the rules set upon them - untill the time was right for them to turn around, give the carriers the finger and set the rules how Apple wants to play them. (too much tinfoil hat?)

Anyways, it's a refreshing change of pace, and a nice gesture for Apple to go forth and do all that. For the rest of us that know how Apple rolls, we've all be patiently waiting for the price to go down (and more carriers to be supported) - or we've been waiting for the ipod touch instead. Or we're waiting for revision B down the road when something wacky happens with the iphone 6 months from now.

Re:Steve; make it retroactive to all Apple product

When the SE/30 was released Jobs was not in charge. That was Sculley's reign.

Re:Steve; make it retroactive to all Apple product

So what is the real reason Mr. Jobs?

If you give $100 Apple Store credit to the sort of people who bought an iPhone on iPhone Day, that's all the excuse they need to buy a new iPod, or a MacBook or another iPhone.

What would you have bought with a credit for your SE, a IIe?

Re:Steve; make it retroactive to all Apple product

"If you give $100 Apple Store credit to the sort of people who bought an iPhone on iPhone Day, that's all the excuse they need to buy a new iPod, or a MacBook or another iPhone."

Even better if most of them spend it on Apple software. Such as, I dunno, maybe Leopard? Due out next month?

Teh Steve is laughing all the way to the bank, and this time I'm laughing right along. This is so brilliant it almost has to be on purpose.

Re:Steve; make it retroactive to all Apple product

Even better if most of them spend it on Apple software. Such as, I dunno, maybe Leopard? Due out next month?
Teh Steve is laughing all the way to the bank, and this time I'm laughing right along. This is so brilliant it almost has to be on purpose.

Something you learn in basic economics, is that opportunity loss is a loss as any. I know what you think: "haha, software costs $0, so they didn't give you anything at all".

Nope, piracy of the OS itself is almost non-existent on Macs, and those early buyers would purchase Leopard for $100. Those are $100 lost for Apple, never mind how they are going to be spent.

The benefit for Apple here is that it's not cash but store credit, from then on, what they do with it is doesn't matter.

Re:Steve; make it retroactive to all Apple product

True, true. Apple will miss out on, oh, let's call it 400,000[1] credits used * $100 = $40,000,000 of potential unrealized revenue.

However, they don't just give that money up and get nothing for it:
* They get great publicity that makes them appear responsive to customers - the story is all over the non-tech news.
* They restore a lot of goodwill among early adopters, who are an important crowd for Apple.
* It's a great loss-leader to get those people - known big spenders - back into the store to spend more money.
* If it's used on Apple software or hardware, it will increase their installed base and marketshare.

So yeah, they're going to miss out on $40 million, but they get value for it that's probably better than the same amount spent on advertising in any media.

[1: Assuming they've sold 800,000 eligible units and 50% of buyers acquire and use their credits.]

Re:accdb?

Where I work, we use a lot of Microsoft Access. Does Apple make anything like that?

No, but there have been great strides in mental health related pharmacology that may help with that Access usage.

Why I was surprised

There wasn't a 16GB Model at the $599 price point.

I was annoyed, but not 'urge to kill rising' simpsons style or anything. Just seemed cheap that I've barely gotten my second bill for it and yet somehow they can drop the price $200 for no reason other than because it makes sense.

I'm no stranger to buying tech, I paid $499 I think it was for the Treo 300 when it came out day one. It didn't get a discount until probably six or so months later. But 10 weeks? Bit much but meh.

Re:Why not $200 store credit?

For the same reason that I can't go to Intel and ask for $200 after every round of price drops. If someone chooses to buy a product he or she must make a decision if the purchase is good value. Yes= buy. No= don't buy. Just wait. Early adopters thought the price was right at launch. Just because a new, better deal comes along it doesn't change their initial decision; the purchase was good value. Surely they knew a price drop was innevitable, granted perhaps not so soon or so much, so any free money is a terrific deal.

As Mr. Jobs so delicately points out these people technically aren't entitled to anything but Apple wants to keep them happy. If they were given all $200 then they get the benefit of being the first to have an iPhone for nothing. People who decided to wait for a price drop would be a little upset if there is no 'early adopter penalty', and that they could have been using an iPhone all this time if only they had known they could get $200 back.

Re:Why not $200 store credit?

Intel's a great example, considering they just re-priced their Xeon line so that the quad-core chips cost what the dual core chips of the same clock speed had cost the day before. How many end users that purchased quad core processors the day before do you think saw a refund of any of the several hundred dollar difference? What about the people who bought the dual core chips the day before? Is intel going to send them a free core?

If a product is worth the price to you when you pay for it, then you should be comfortable with price changes after you made the purchase.

Re:Why not $200 store credit?

Is intel going to send them a free core?

The mental image of some geek at his house opening the mail to find a little 40 mm^2 (or whatever the area of a single xeon core is these days) piece of silicon and going "wtf am i going to do with this?!" made me laugh. Thanks :)

Re:Why not $200 store credit?

It's even better than that - since it's store credit, the insane markup on Apple products means they are probably only going to end up giving away $30 to $40 worth of things away.

I agree with what someone else said though - if you want things on the day, you pay extra. It's always been the way, though maybe 2 months after release is a bit soon for a price cut like this. Jobs cites the holiday season as a reason - why not cut the price in November then? At least that lessens the chance that every iPhone owner is going to want your head impaled upon a pike so they can wave at it in a funny way.

Re:Why not $200 store credit?

So, by 2019, it'll be Christmas year-round? Yay!!

Re:Steve; make it retroactive to all Apple product

This is the "market will bare" guy.

I thought that was Larry Flynt.

(You don't mean "bear," do you?)

Re:Why the surprise?

Unfortunately I only bought my iphone because my beloved Samsung D807 suffered a premature demise.

That said, I think most of us early adopters aren't angry so much that we might have saved $200 by waiting, but by the fact that all kinds of riffraff can now afford the most fabulous object in the world. We paid a premium to assert our superiority and now we have to hear: "Oh, you bought it before the price drop?"

I didn't lose anything

I gained two months of phone use over someone who has waited; and I have made good use of the phone in the last two months, it's been way more useful to me than the previous phone I had. Well worth the slight extra amount I paid.

After all, any electronics purchase is a gamble - you never know when prices will be cut. But it's a gamble you cannot lose if you like what you bought and you buy at a price that works for you.