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Crazy Like A Fox

Posted by: Stephen Wildstrom on September 07, 2007

So does anyone believe that Steve Jobs’ announcement yesterday of a $100 credit for folks who bought iPhones before the $200 price cut was really a spontaneous response to angry customers?

Apple surely knew that early buyers were going to be unhappy with the sudden and dramatic price cut. The credit was probably part of the plan from the beginning, but was held back for the sort of dramatic effect Jobs loves.

Besides, Apple seems to be, as my labor negotiator friends used to say, giving away the sleeves off its vest. My guess is that the credits won;t cost Apple more than $10 to $25 per phone. First, a substantial part of credits like this typically go unused. Second, while all the details are not yet out, it appears that the credit will only be usable for merchandise at Apple Stores—physical or online—and not for content at the iTunes Store. At least 75 cents of every dollar spent at the iTunes Store goes to content owners, while Apple’s cost for goods, especially software, sold at the Apple Store, is much lower.

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Reader Comments


September 7, 2007 11:04 AM

Regardless of any planned, behind-the-scenes dramatics, I'm glad that Apple took this step. It serves the firm very well: they not only get to move a ton more iPhones at a cheaper price, but they mollify their hardcore fan base and get a bunch of free, positive press. Oh, and as an early iPhone adopter, I get something wholly unexpected: $100 to blow at the Apple Store. Woo-hoo!

Nati Jay

September 10, 2007 09:24 AM

Kind of just goes to show you about new technology and perhpas waiting around for these price cuts. As with all new electronic gadgets and gaming systems, the time when they cost the most is when they are first released. Only time will tell as to when and if certain products will receive a price cut somewhere down the road. It's definitely a good idea seeing as how Im sure there have already been hundreds if not thousands of somewhat angry iphone owners whom have stormed Apple stores demanding the difference back. Also goes to show you how much Steve Jobs is taking into consideration the already current loyal apple customers.

Robert Lehar

September 10, 2007 10:59 AM

I believe that Steve Jobs probably underestimated Apple's loyal following and did not quite expect the iPhone price rebellion. Whether proactive or reactive, what matters is that Apple's handling of iPhone's PR has been brilliant and the beat (sorry, buzz) just goes on and on.

Ken Norkin

September 10, 2007 12:27 PM

Merchandise at Apple Stores includes iTunes gift cards. So in fact the credit *can* be used for content at the iTunes store.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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