7th September 2007

Negative Reinforcement Training from Apple

Early Adopter TaxThe ‘Net’s abuzz today with the two biggest announcements from Apple this week – namely, the price slash on the Apple iPhone (by $200), and of course the impending ability to add custom ringtones to the iPhone.

I’m happy about the second announcement, and not too terribly upset about their ringtone pricing of 99 cents per ringtone – it’s much cheaper than most ringtones for sale, and if that’s still too much for you, there are several hacks floating about that will enable you to put ringtones on the iPhone for free, the best of which is (IMHO) iFuntastic.

But the first announcement, that Apple has dropped the price on the 8GB iPhone by $200, has me puzzled. Sure, I’m not happy that I wound up paying the “early adopter tax” by being one of those who bought my iPhone as soon as it came out. And Apple’s third (and somewhat quieter) announcement of a $100 in-store credit for us early adopters has only partly assuaged some of my unhappiness (those who purchased an iPhone within the last two weeks can get a full refund of the price difference), although I do appreciate, and will use, the credit.

I’m a business person myself, so to be honest, from a business standpoint I understand why Apple dropped the iPhone price, in fact it makes perfect sense – to make the most of this quarter’s sales/earnings figures, gain a bigger share of the cell phone market, give their new friends at AT&T a nice 3rd Quarter boost as well, and gain a toehold in the highly lucrative younger market, many of who could not afford the previous $599 price. All good reasons and no doubt Apple made a good decision to drop the price.

What has me puzzled is why they did it so soon. It’s very typical for a hot new cell phone to come down in price, even substantially, but it usually doesn’t happen until some time has passed. And “some time” is generally much longer than 10 weeks. Long enough so that the folks who bought it first don’t feel ripped off. Like many other iPhone owners I know, the drastic price drop coming so soon has caused the phone to lose some of it’s cachet, and we’ve lost our ability to gloat over having one.

So I’m afraid that this move may hurt Apple more in the long run than the offsetting benefit of the increased sales they will likely see this quarter, as a good portion of the mac-faithful (myself included) will be much less likely to run right out and buy the next new gadget Apple produces. I’ve spoken to a number of my Mac-buddies, and all have said the same thing. Next time we’ll wait and see if the price drops.

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2 Responses to “Negative Reinforcement Training from Apple”

  1. On September 7th, 2007,Virginia Says:

    I’m no business whiz, but Apple held the line on iPod pricing almost forever. This approach indeed seems like a slap in the face: too much, too soon.

  2. 1 On September 7th, 2007,Kitten Says:

    Thanks for commenting Virginia. I agree, and I’m definitely going to use my $100 in-store credit, but likely will try to keep my purchase as close to that $100 as possible. Unless I break down and buy the Myvu Media Player Glasses…….dang it! Why does Apple have to create such nifty gadgets when I’m mad at them???

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