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Apple Legend Woz Blasts iPhone Price Drop 272

Posted by Zonk
from the cuz-the-price-is-crazy dept.
Stony Stevenson writes "Apple cofounder Steve Wozniak Saturday blasted Steve Jobs' decision to drop the price of the iPhone by $200 just two months after the product was launched. Said Woz: 'Everyone expects technology to drop in price. The first adopters always pay a premium. I am one of them. I am used to that. But that one was too soon, too harsh ... A lot of people from Apple, even a lot of people that worked on the Apple Lisa and Macintosh computers in the beginning now work at Google. The thinking over at Google is very much like early Apple days. The fact that they give people time off to work on their own ideas is exactly matches some of the things that made Apple great. I wish Apple did that.'" We just discussed the price drop last night.
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Apple Legend Woz Blasts iPhone Price Drop

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  • Supply and Demand (Score:5, Insightful)

    by seanadams.com (463190) * on Monday September 24, 2007 @02:20AM (#20725389) Homepage
    I work in the hardware business and I can tell you it is difficult enough to get enough inventory built for an ordinary product launch, but for what has been called the most successful CE launch _ever_... there is just no way they could have met demand without boosting the initial price significantly. And the problem with keeping the price high too long is that your momentum will dry up, and people won't even be paying attention any more by the time it does drop.

    You can call it gouging if you want, but what if they'd instead just run out of stock immediately? Think "tickle me iPhone" - I don't think consumers would have been impressed by that.

    Jobs did exactly the right thing. Price no lower than where you meet demand, and only once production has ramped up (which usually takes about two months - go figure) THEN price it at the sweet spot. Also consider seasonal factors which made it necessary to do this before the Xmas shopping season, which for the gadget industry begins right now.

    I don't think that ANYONE, not one single person, who can afford a $600 phone and 2yr commitment to a $100+/mo plan, has a valid gripe about paying $200 extra up-front to be among the first to own it. If it was worth buying when you bought it, who cares what it sells for now? Were you hoping it would keep it's resale value or something?
  • by QMalcolm (1094433) on Monday September 24, 2007 @02:23AM (#20725411)
    It's true. In the end, you were paying $600 for a phone. You can also get phones for $50. By paying WAY more, you either want to get it first or have the absolute best phone possible. Your phone still works. You got it first. If that $200 will actually harm you financially, you shouldn't have bought a $600 gadget in the first place.

    It sucks, but there's nothing WRONG about it.
  • by not-quite-rite (232445) on Monday September 24, 2007 @02:35AM (#20725479) Homepage Journal
    The pricing seemed quite a smart way of letting market forces apply feedback in the control loop for the sale of the iphone.

    As much as people cry about the price, it means that those early adopters payed a premium for what they wanted(an iphone straight away gimme gimme gimme), and those slower to take it up, will also buy and feel better about it due to percieved value.

    (I'm also happy because it means all the US early adopters took the brunt, while the rest of the world reaps the rewards :P)
  • by rolfwind (528248) on Monday September 24, 2007 @02:53AM (#20725553)
    but, ultimately, the people who bought it were willing to spend $600. Plus that $200 is insignificant in the long run, you are spending, what? $60 on that phone for 2 years? That 400 + 1440 = $1840 vs 2040. Not that big of a deal. Subtract the $100 giftcard (hey, if you don't want to buy anything with it, it makes a great birthday/christmas gift to someone who does).

    I know, I hate when technology drops too, but the psychology of this is fascinating. It's similiar to gasoline - people watch the price like hawks and when its $.05 lower across town, they'll waste 20 minutes driving and another 1/4 gallon to reap "savings" that are not worth the cost in the end.

    And people are getting so stressed out over this, you have to wonder if they are the same people who'd buy some new (american) car during the first 9 months only to get stressed out over the end-of-year price breaks into the thousands or the fact that that car is worth a few thousand less once they sign the papers?

    Look at it this way: You got a nice product. As a bonus, out of the blue, you got a $100 gift certificate. Now that it's slightly cheaper, maybe you can get your spouse one, whatever.
  • by Don Negro (1069) * on Monday September 24, 2007 @02:56AM (#20725563)
    He's still relevant because out of all the engineers who've ever done anything, Woz is very arguably in the top 10, period, of all time, end of story (which makes him one of the few, if any, who are still alive)

    He's he first man who built modern computer hardware, then personally wrote the software that ran on top of it, all the while providing an extensible hardware and software system that other engineers could (and did, wildly) build upon. He literally built a huge chunk of this industry by himself, and another huge chunk was built on his shoulders.

  • by W2k (540424) <`wilhelm.svenselius' `at' `gmail.com'> on Monday September 24, 2007 @03:09AM (#20725615) Homepage Journal
    The reason people are upset is probably that they are coming to realize they paid $600 for a shitty designer phone with an expensive lock-in contract, and by waiting two months, could have paid $200 less for the exact same deal. Still a rip-off, but maybe it'll be another couple hundred less in a year...
  • by servognome (738846) on Monday September 24, 2007 @03:40AM (#20725771)

    He's he first man who built modern computer hardware, then personally wrote the software that ran on top of it, all the while providing an extensible hardware and software system that other engineers could (and did, wildly) build upon.
    Many people were doing similar things at the time. The difference was how Wozniak went about engineering focusing on usability and openness. Rather than making personal computers an engineering device (something you make), he made them an engineering platform (something you use)
  • by chris_mahan (256577) <chris.mahan@gmail.com> on Monday September 24, 2007 @03:50AM (#20725819) Homepage
    Bad analogy. Sports require physical attributes that are well-known to deteriorate over time. Mental skills, unless degraded by disease or advanced age, do not.

    The genius of Woz is that he used pen and paper to create something that had not been created by people who used actual hardware. He understood the fundamentals completely, but let his imagination run wild on a "what if".

    How do you know he is still not doing that right now?

    Must skill and artistry, in order to be recognized as valuable, serve the corporation?

    Must Steve Wozniak, in order to be relevant in your world of Treasure, build another such financial behemoth as Apple?

    Surely you must recognize that there are many people around the world who pursue their interests with dedication, skill, and imagination with little care of the financial gains to be derived.

    Allow me to speculate. If Steve were independently wealthy, and no longer constrained to generate income to feed and shelter his family, would it not be a better use of his time to use his talents and breadth of experience to help his fellow man? Perhaps it is completely understandable that he should not relish the prospect of working at a soul-crushing cube farm. Perhaps it is acceptable for a man to stop trying to maximize shareholder investment when such a man has already done so amply, and rather dedicate himself to a different purpose.

    Perhaps he has indeed changed what he does. But that does not make him less of a man.

     
  • by toQDuj (806112) on Monday September 24, 2007 @04:06AM (#20725893) Homepage Journal
    So the iPhone became a lot less expensive now. And everyone complains? Why?
    I mean, the alternative is that Apple would have kept the price high, and made more money. That would have had some people complaining, for sure!

    Sometimes it seems you just can't do things right.

    B.
  • by amRadioHed (463061) on Monday September 24, 2007 @04:14AM (#20725929)
    A fool and his money are soon parted. Sure Apple accepted their money, but who wouldn't?
  • by Animats (122034) on Monday September 24, 2007 @04:19AM (#20725959) Homepage

    Big deal. Early this year, I bought a 2007 Jeep Wrangler. If I bought the same vehicle today, it would be $3000 cheaper, because Jeep is now offering big sales incentives. And the warranty period was only three years when I bought it; now there's a lifetime power train warranty. (That has more to do with the breakup of Damlier-Chrysler and retaining customer confidence, though.)

    What's really annoying iPhone suckers, I suspect, is that their overpriced status symbol just stopped being an overpriced status symbol. The CEO of Rolex once said "We are not in the watch business. We are in the luxury business." That applies here.

  • by not-quite-rite (232445) on Monday September 24, 2007 @04:19AM (#20725961) Homepage Journal
    All excellent points and I agree with most of them. But I do disagree with your first one.

    Mental ability changes over time. Be it flexibility, adaptability, etc there is a marked change as one gets older. Once you throw in a bit of trauma, emotional distress, etc there are many things that can happen "upstairs".

    (Ever hear the old saw about most maths guys making their breakthroughs in their early days?)

    And when I use the term relevance, I mean why does his doing something great years ago automatically qualify him as someone to listen to on everything that he chooses to ramble about? Or do we stop evaluating the source of information, because of emotional bias and hero worship?

    I don't mean to come off ungrateful for what he did for the world back then, but how many free dinners does he get off it. If anyone else said what he gets quoted on, would it be special?
  • by JonTurner (178845) on Monday September 24, 2007 @04:35AM (#20726029) Journal
    >>The fact that they give people time off to work on their own ideas is exactly matches some of the things that made Apple great.

    Wait one second here! Are we talking about the same Apple Computer company because the one I know about routinely worked its engineering teams (all the way from the Apple ][gs, Lisa, Macintosh up through Newton) to the point of complete exhaustion and then at various times, during the "Black Friday" purges, suddenly ended people's careers. Frantic system development and high stress was the norm. To attempt to cast it as anything else is pure spin.

    Maybe Jobs' Reality Distortion Field is finally affecting The Woz. Or maybe this mythical "time off" applies only to Apple Fellows and the most senior employees.
  • by Opportunist (166417) on Monday September 24, 2007 @05:15AM (#20726213)
    Both were lucky. They are complementary to each other, neither of them would have succeeded alone. Woz would've created a computer nobody wants to use, Jobs would've gone bankrupt trying.
  • Re:Woz vs. Gates (Score:5, Insightful)

    by rs79 (71822) <hostmaster@open-rsc.org> on Monday September 24, 2007 @05:40AM (#20726313) Homepage
    You know, back in the day (70s) gates published code in dr. dobbs documenting undocumented Z-80 instructions. Woz just made $2500 computers that those of us with s-100 systems found rather irrelevant. Gates built his own machine but had no interest in selling hardware, just software, which I kinda wish Apple had done.

    Point is, back then Gates seemed like a fellow hacked and woz was just one of 100 guys that started a computer company and did all the hardware design.

    I can't say I'm real impressed at having written machine code or done a (very non-statndard) disk controller. We all did that back then.

    The first x86 on the net was an S-100 system running Gates Xenix in LA (gryphon.com). I don't think an Apple II ever talked to the network.

    Obviously I'm not talking about now. Woz is cool, Bill is not. But that's not how it looked back then. The Apple II was regarded by people that already HAD a computer as a toy not worthy of much of anything and never understood what the fuss was all about. I think the reverance of Woz was strictly by people whose first computer was an Apple.

    In a world without Apple there were still lots of choices and I have a greater revernce for say, Jay Miner than Woz. But if Apple hed nevr existed I'm not sure the landscape now would have changed much. Again, much as I hate to say it, MS drove the market and was responsible for the advent of cheap usable computers even your grandmother could use.

    Let me be clear, I loathe gates and ms. But if you strip the emotion away gates has done more to get us where we are then woz ever did.

    You may now mod me down to "-5, asshole". But you know I'm right. And don't worry it pains me as much to write this as it does you to read it.

  • Re:Shut up Woz (Score:3, Insightful)

    by tgatliff (311583) on Monday September 24, 2007 @06:19AM (#20726481)
    He undeniably "was" a great engineer... Unlike Jobs, he gave up real work along time ago.... Besides, an engineer voicing his opinions on individual product prices is like a business person voicing his opinion on the design of the product. He has no damn idea what he is talking about, and is simply showing his ignorance by talking about it...
  • by x1n933k (966581) on Monday September 24, 2007 @07:28AM (#20726853) Homepage
    I absolutely agree, it isn't wrong. However in a lot of cases it is the people who cannot afford these items who do end up purchasing them. I use to place a lot of calls for clients to T-Mobile and AT&T who would purchase expensive phones (Sidekicks comes to mind), sign a contract and would be in poor financial shape a few months down the line because they paid $300 for the phone, then $80 data/phone plan with a credit card.

    My point is that a lot of customers are lower-middle class who are spend happy on credit they can't support. This is a major problem is North America, and companies can't help but to take advantage of that.

    [J]
  • by Lethyos (408045) on Monday September 24, 2007 @08:12AM (#20727169) Journal

    To the whiners about the price drop: I see no rational reason for you to be upset. You are early adopters and you evidently decided favorably to the value proposition of the iPhone. People who complain about a price-cut being a bad thing simply amaze me: they are pinning their own impatience, foolishness, or buyers remorse on someone else. If you feel cheated, take some personal responsibility and accept that if you did not like the price, you should not have made the purchase! When prices are lowered, it is almost always a good thing (there are exceptions for undercutting and subsidized goods, but I digress), and in this case, it is likely in response to market forces. That is how capitalism is meant to work. All of that is neglecting the fact that analyses of the manufacturing costs [gizmodo.com] revealed huge margins for Apple almost immediately after the release (and reported on again [tuaw.com], and again [reuters.com], and again [computerworlduk.com]). To the people who are complaining, you should make sure you understand caveat emptor [wikipedia.org] before you plunk down over half a grand for a cell phone, especially since many—if not most—of you had all the facts available up-front. And in the interest of full disclosure, I do own an iPhone and made my purchase shortly after Apple subsidized my $200 early termination fee to Sprint. In closure, thank you for the price-cut, Steve!

  • Re:Pffft (Score:1, Insightful)

    by Anonymous Coward on Monday September 24, 2007 @08:52AM (#20727491)

    Pffft iPhone thats so yesterday..
    I, as a Mac owner wished your joke/troll to be true. It is not so yesterday, it is still covering entire Mac news scene for months.

    Look to digg.com/Apple once was a good, "lighter" source of Mac news, impossible to stand now. Macworld barely figured their users MAY HAVE zero interest in iPhone while they own Mac and even iPod.

    I have a my yahoo page just covering Mac news sites jokingly named "Maccie" and I am not seeing anything except that damn phone.

    Thanks to Slashdot, every site has "comments" section and you can't dare to hate iPhone or ignore it. I made my point numerous times that it is _not_ a smart phone, it is a high tech multimedia device with communication capabilities. I will keep saying same thing until Apple puts a SDK with a frightening NDA (or not) to their Developer pages and release iPhone supporting XCode.

    That time, a true revolution which everyone wished for will happen and it will deserve to be top spot of news.

    I have really gave up reading Mac sites except a few highly respected, non fanboy blogs which are founded long time before iPod or iPhone. I lost my complete respect to some blogs after figuring they are _really_ Apple fanboys, amateurs and nothing else.

    I was happily ignoring the device and thanks to cult member people who even flames Woz, one of the founders of Apple just because he dares to bitch about price, I now hate it.

    As Woz is engineer, he is being nice to Apple. I am sure such a legendary hacker may have couple of thoughts about no SDK situation.

  • by Anonymous Coward on Monday September 24, 2007 @09:25AM (#20727841)
    The competition DIDN'T, that's for sure.

    Dickwad.
  • by onetwentyone (882404) on Monday September 24, 2007 @09:47AM (#20728095) Homepage

    My point is that a lot of customers are lower-middle class who are spend happy on credit they can't support. This is a major problem is North America, and companies can't help but to take advantage of that.
    You're telling me companies should be responsible for the self control and fiscal responsibility of the individual? Sorry but if someone puts themselves in a bad financial position through unnecessary "for me" purchases, they have no one to blame for themselves. Proper budgeting, hell even SIMPLE budgeting, should be something we teach our kids in school from early to out.
  • by tukkayoot (528280) on Monday September 24, 2007 @10:29AM (#20728631) Homepage

    You're telling me companies should be responsible for the self control and fiscal responsibility of the individual?

    No, it did not look that way to me. He said in his first sentence, "it's not wrong" and in his closing remarks that companies "can't help but tale advantage." It's ugly and one might say amoral, but ultimately the most culpable party in a situation like this is the individual buyer.

    Proper budgeting, hell even SIMPLE budgeting, should be something we teach our kids in school from early to out.

    I agree 100%.

    People are stupid, especially about how they spend their money, but they are stupid because they've grown up in a consumer culture where they're bombarded with slick marketing and have their spending impulses egged on at every level, while most receive no education on how to properly manage a budget, or think critically, or about what their psychological blind spots and weaknesses might be, or how others will seek to exploit them.

    In my opinion, this is basic, important stuff, and yet I doubt you will find any of it on a NCLB test.
  • by king-manic (409855) on Monday September 24, 2007 @11:16AM (#20729313)
    He's a clever geek, no doubt but he owes everything to the good fortune of meeting Steve Jobs. Without him Woz would still be a calculator engineer at HP. And frankly I find it difficult to take him seriously when he calls his biography "iWoz" when he had nothing to do with the Mac let alone any of the "i" products. Publicity hungry empty vessel. Who cares what he thinks: he has no particular insight.

    Without Woz, jobs would be a sleazy new age religious leader. Without Jobs, Woz would be somewhere in the upper echelon of HP, wasting away his genius on crappy main frames and calculators. without them both meeting Personal computing would be very different. Billy and his gang would have no one to steal ideas from. IBM wouldn't have been panicking and signed their john handcock on a really dumb licensing deal with Billy. Ubiquitous computing may never have happened. And We may all be marveling at how the IBMs new Big Blue 1.0 gzh main frame is just a paltry $500,000, 600 lbs, and comes with 10 gigs of hard drive space because computing never hit it's stride with efficiencies of scale.

    don't' over estimate Jobs. He's done well because he's foudn the right people to do the right things and has both vision and business accumen but he didn't do it all alone. dont' under estimate WOZ, a hardware/software genius is hard to find. He wrot ehte OS and designed the hardware. Few can do both.
  • by kestasjk (933987) on Monday September 24, 2007 @11:37AM (#20729661) Homepage
    Simple budgeting is common sense. Imagine teaching simple budgeting in school:

    2. ii) You have $3,250 in the bank, 5 unpaid bills, 2 kids, and a five figure income. Do you:
    A) Buy an iPhone
    B) Invest in the sub-prime market
    C) Pay the bills
  • by Anonymous Coward on Monday September 24, 2007 @12:05PM (#20730017)
    I would be sad if I lived in an country who's economy considered $200 gadgets to be luxury.

    There are only about five billion people in the world like that.

  • by seanadams.com (463190) * on Monday September 24, 2007 @12:09PM (#20730077) Homepage
    Give me a break. A low price and lack of inventory hasn't hurt the Wii.

    Bad example - while both products are luxury goods, the Wii has totally different customer demographics. The Wii customer is far more price sensitive and will simply buy a different console if it's overpriced. So a higher launch price would have caused a _failed_ launch, and immediately earn the product a reputation of being overpriced. Capturing some extra revenue in the first couple months is fine if you can do it, but not if it kills your product for the long term.

    With the iPhone, there is a tremendous amount of price elasticity - units could be profitably sold at anywhere between $0 (with service plan) and perhaps $999. That's a different ball game altogether.
  • by statusbar (314703) <jeffk@statusbar.com> on Monday September 24, 2007 @12:22PM (#20730275) Homepage Journal
    A fool and his money are BEST parted.

    The last thing you want are fools running around with economic power.

    It can be viewed that it is on of your responsibilities to humanity is to extract money from fools.

    --jeffk++

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