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.