The legions of iPhone owners who were enraged by yesterday’s $200 price cut on the device they paid $599 for have been heard in Cupertino, as Apple CEO Steve Jobs has announced a $100 store credit good for any purchase at physical Apple Stores or the online Apple Store. The offer applies to anyone whose purchase fell out of the 10 business day window where Apple gives out price break credits.
Though making a considerable offer toward appeasement, Jobs did take the opportunity to chastise iPhone owners in his letter:
Second, being in technology for 30+ years I can attest to the fact that the technology road is bumpy. There is always change and improvement, and there is always someone who bought a product before a particular cutoff date and misses the new price or the new operating system or the new whatever. This is life in the technology lane. If you always wait for the next price cut or to buy the new improved model, you’ll never buy any technology product because there is always something better and less expensive on the horizon. The good news is that if you buy products from companies that support them well, like Apple tries to do, you will receive years of useful and satisfying service from them even as newer models are introduced.
Ouch! What say you, iPhone owners? Is this good enough? Or will nothing less than $200 do it for you?
Thanks for the heads-up, d0b3rmann!c
87 responses to “Breaking: Apple Gives $100 Credit to iPhone Early Adopters”
No matter how you look at it, this is an approximate $100M hit to net profit of Apple for this quarter. Assuming that 1M iPhones were sold, some in the 10 day window where Apple will give back $200 of margin and most outside of that window, where Apple will give up margin on products in its stores, this isn’t good if your an Apple shareholder, and hopefully not something that occurs on a regular basis.
I am totally satisfied. All I can say is, better than nothing.
Jesus, what a bunch of whiners!!! Get over it – if you waited in line, or proudly showed all your friends how muh cooler you are than the troglodytes with crackberries and zunes, then you knew you were paying a premium. It’s worth it. Apple makes better products than any company I can think of. And you KNOW it’s going to be cheaper down the road. So SHUT THE F*CK UP!!!
Works for me! iLife ’08, here I come! I just hope I don’t have to find my receipt, because that sucker is long gone…
Nice “I’m sorry, but eff-ewe and your horse” attempt. “if you buy products from companies that support them well, like Apple tries to do” you mean support them (in the case of the 4GB iPhone) for the entire 68 days it is a product? I’ll have whatever Steve is smoking, please!
Not an iPhone owner (yet) but I think this goes above and beyond what most companies would do. I applaud Apple for this.
I’m impressed. They didn’t have to do that. I bought two iPhones when they first came out. I wasn’t terribly upset by the price drop, given the feeling of smug superiority I enjoyed for two months. This is an added bonus.
i think this is more than fair. as for steve’s comments on the technology road being “bumpy” though i think that’s correct in the computer hardware and software world, but not so much in the cell phone market. no phone company releases a “flagship” product with such fanfare only to undercut it so soon.
Way more than necessary but good for Apple for realizing it was worth it to them to silence the whiners. I didn’t buy an iPhone because a) you knew the price would go down, and b) their would be a v2.0 that would inevitably fix many of the problems that would surface with a first generation product.
But the flip side is that I have been denied the use of what does seem to be a very alluring product. Those early adopters have been able to use the device they were so anxious to get and prices and faetures do change at a break-neck pace. Of course maybe the people moaning the loudest have the same personality disorders that caused so many to line up for hours to buy a piece of hyped hardware from a multi-billion dollar corporation.
I felt a little burned yesterday, BUT my iPhone has truly been worth every penny that I paid for it. I am a total gadget freak and this is absolutely the coolest gadget I have ever owned. The $100 store credit is gravy…
Kudos to Apple, this puts them above and beyond. I feel like giving Steve a hug.
-Thomas
That’s good news. It’s good to see that Apple and Steve Jobs value customer loyalty. It’s an increasingly rare commodity and a stupid thing to waste.
There are lessons to be learned by both sides involved in this saga.
Well, I am not really satisfied with this. I posted my reasons for being upset yesterday, chiefly a feeling of betrayal of trust by a corporation I adored. Apple currently runs at $36 percent margins, so at the most, each credit voucher will cost them $64 out of pocket. Factor in the fact that this credit will probably be used most frequently for peripherals, software, chargers, headphones–whatever, and the out of pocket costs drop to maybe $50, as the margin is higher on these products. Then factor in that many credits will never be claimed (my guess is half unclaimed) or used as a credit on a larger purchase, and the cost to Apple (offset by higher profits on items that would not have otherwise been purchased) and my guess is that the true cost to Apple is $20 per phone, or somewhere around the $14,000,000 or so.
Therefore, my conclusion is that this is not really a sincere effort on Apples part. $20 bucks a person. Big deal.
Apple has been quoted as saying that this price drop was planned long ago. My guess was this ‘credit’ program was as well. Apple has grown arrogant, and it is showing. And in the end, Americans hate arrogance, and will sooner or later grow weary of this cynical corporate behavior. Sure, people will still buy, but unless Apple changes its attitude toward its customers, it will not be pulling down 36 percent margins 5 years from now.
I would have been completely satisfied with $100 cash money back. That would have cost Apple about $70,000,000 and in my opinion, restored the trust.
As it stands, no trust has been restored with me. Sure, I will take my credit and do something with it, but I my emotions toward the company will never be the same. From now on, it’s Caveat Emptor, baby, all the way, the same attitude I have toward every other corporation on the planet.
Sure, I will still buy Apple; they make great stuff. But maybe I will skip a generation of this or that, or do without Leopard until whatever is next comes out, or buy something from Amazon instead of impulse buying it at the Apple store on a Saturday afternoon.
This is just me, my feelings, one person’s reaction. And it is an emotional reaction, not a cerebral one. But it is real, and Apple’s unresolved betrayal of my trust will cost them much more in long-term lost profits than the $100 cash refund would have.
I don’t know why everyone is whining about this. If you bought the iPhone for $600 you made the conscious decision of buying it for that price. Apple would be screwing you if you wouldn’t get what you paid for (like a corndog instead of a phone). Don’t complain that someone else will buy it cheaper because that’s what always happens with tehnology. Now people who maybe couldn’t initially afford this product will be able to enjoy it as much as you do.
Andronicus…….you are one hard to please tough cookie…cheer up geek boy
OK. Good enough. As long as there is no expiration date on the credit. I’ll use it for my next iPhone.
not sure if it was smart idea. people will just whine more next time. frankly as a long time apple user, i know how they work, though the price drop surprised me, it wouldn’t have pissed me off. it happens with anything you buy in tech.
so after all this, if anyone is still whining, i feel that they should just throw themselves of a bridge in their depression. cause we don’t really need people like them on this planet.
Actually, this credit is pretty astonishing. I’ve never heard of a tech company doing anything like this. Geez, Andronicus, what do you expect? Some people will always be impossible to please. Can anyone think of anything like this before? Normally I expect to get burned on a tech purchase… a few months later you always can expect a processor bump, price drop, some new feature, whatever. I’d say this is above and beyond by Apple. most tech companies would just say “Thats the way it goes”.
I’m satisfied. Indeed, I was thinking about it today (before the announcement) and I decided that I would be perfectly happy if Apple gave us early adopters a $100.00 credit at the Apple Store. I have enjoyed having my iPhone, which I purchased on August 3rd, and have had many people ask about it and want to touch it! I felt like a member of the avant garde, someone who has something that others desire. Now, as an Apple shareholder, I want more people to join the club. The new price will help the iPhone be more competitive, and may make it easier for folks locked into current cell phone contracts to justify switching to AT&T.
Unbelievable. People should know that when technology can change quickly and prices can drop significantly. I like no doubt thousands of others bought a power pc iMac just a few weeks before apple switched to Intel. Did we get a rebate or a gift certificate? God know. It’s just called bad timing. It happens to purchasers of consumer technology everyday. The minority of super-noisy iPhone owners complaining about this are self-indulgent whiners. I’m dissappointed Apple gave them anything.
Andronicus, get over it already! Apple didn’t have to do anything to placate the whiners like you.
Andronicus – why go without Leopard… just put your $100 credit back towards the $129 for Leopard.. infact you will be getting a good deal more than the $100 bucks value if you compare it to the peripherals you note in your argument (low margin it would seem).
so you get leopard for $29 bucks, and an iphone… and you feel good about it.. bargain!
Keep in mind, Andronicus is also angry that the prices of DVD players have gone down so much.
All I can say after the rollercoaster day is that Apple’s move is unprecedented, it has restored my faith in the company. This reflects upon more than just what Steve says or commands. I’m sure many employees were concerned ( being fanboys themselves) and surely helped stir things toward the final resolution.
As I posted here earlier, we all have to have expected a 16 gb iPhone by Sept. At least I did. So I think this is where Steve is getting the $100 figure. Way to go Apple, not a sign of weakness but a sign if the way a multi billion dollar company can still be DIFFERENT.
Oh and let’s get Flash on my $500 iPhone soon or I guess we’ll start rioting.
Listen, Steve took his shot, now let me take mine. I’d have no problem with a price cut about a year out, of say 10-20%. A 33% price cut 2 months in is an entirely different story. We supported Apple introducing a new product. We took the risk the technology wouldn’t work as advertised, etc.
With a track record like this, I can honestly say, other than Lindsay Lohan and Paris Hilton, the rest of the world would stand there and look at the next Apple new product and simply wait 60 days for the big price cut. I know I sure would.
Flat out the price was too high. Hate to say it, but Ballmer was right!!!!
I’m enormously happy as a user and stockholder that Apple has taken the route offering $100 store credit. I think it’s fair, I’m happy to split the difference with Apple and still feel good about the iPhone we bought.
I am not happy with this store credit at all. I will still keep buying Apple products but will never forget this price drop and the feeling of disrespect and ignorance from Apple side. A letter from Mr. Jobs means nothing to me.
Technology changes, often overnight. No man is immune from its unpredictible wrath. We lust. We buy. We giggle. We cry. Steve did the right thing, for the people. I have placed the statue of Steve back on the mantle, in its rightful place. Thanks, Steve.
Great!
I can buy another one for my wife, what i couldn’t afford at first place.
Thumb Up Steve.
Well said, Steve. Apple remains a company many steps above the rest and I gladly pay more to support the best! Capitalism and customer satisfaction rulez…..
I think a lot of you guys are missing the point.
This was not a model refresh, this was just a HUGE price cut. 1/3 of the original price, and only 2 months after launch. The only time price cuts like this have occurred so soon before have been when a product is seriously failing and has been discontinued. I’m not even sure that there are many Apple refurbished products that you can buy with a bigger price cut in this.
EVERYONE bought an iPhone knowing that a cheaper or 3g version would be arrive for the holiday season around late october to november, but not the 5th of September and not $200 cheaper!
Apple seriously burned their most loyal customers, which is such a bad thing to do when you are a company that would have packed up shop 10 years ago without them. Its good that they are offering the credit.
I live in Australia, where iPhones probably won’t be on sale for years (Still no iPhoto printing or TV Episodes or Movies), but I was embarrassed to be an Apple fan yesterday. All better now though.
If you bought an iPhone at the original price you obviously thought it was worth it. Why can’t you be happy for the other guy that gets it for less? And be happy with your iPhone that was worth what you paid for? Grow up!
Andronicus, I was thinking the exact same thing yesterday. I logged onto this post to see if anybody had commented about what you expressed. Apple is a great company but they are in business to make money and I wonder how much of this was planned from the begining. They had to know that tons of people would line up the day the iPhone was released to get one at any cost. Why not charge an inflated price initially, and plan to give a credit(not cash) to the early adopters. All electronics to get cheaper as technology moves forward but a 33% price drop in 68 days is unheard of.
Andronicus,
You sad, sad person. I realize being so sensitive AND having your financial decisions run by your emotions can make for an interesting life.
But what kind of message do you think YOU’RE sending Apple, hmmm? Maybe it goes something like this?
Apple: Hey there! Well, it wasn’t easy but we’ve spent millions of dollars and years of research to bring you this amazingly cool new toy! Well? What do you think? Is it something you’d wanna buy?
Andronicus: GIMME!!!
Apple: Awww, look at that; he looks so happy with his new toy. How adorable.
Oh look! He’s showing it to all his friends! See them all crowding
around him there? That’s just great. Hey, you know what? I think I
wanna make this happiness more affordable to people! As of today I’m
dropping the price!
Andronicus: WWAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!!!!!!!!!!!!!!!!!!!!
WWWWWAAAAAHHAAAAAA!!!!!!! *sniff* WWWAAAAAHHAHHHAAAAAHAAA!!
Apple: Oh no! What happened? Awww, poor little Andronicus doesn’t like
it when I make things more affordable… Hmm, maybe I should have
INCREASED the price… Oh no, now all his friends can afford one and
they’re not paying attention to lil’ Andronicus any more.
Well, from now on we’ll INCREASE the prices of our products if
that’s what’ll make people happy!
“troglodytes with crackberries and zunes”
*Avernum love*
That’s plenty, church of apple, take a seat. Seriously though, what are you, 12? Not only is your logic comletely flawed and missing the point, but in writing that post you managed to simultaneously make yourself look like a jackass and remove any chance you had of being taken seriously by acting immaturely. I don’t agree with andronicus, though I think it was definitely slight greediness on apple’s part to make initial profits on the iPhone so high and very inconsiderate to their loyal customers to drop the price by so much and so soon. However, it’s idiots like you that can give apple fans a bad name by acting so ridiculously in their name. Grow up.
“I don’t agree with andronicus, though I think it was definitely slight greediness on apple’s part to make initial profits on the iPhone so high and very inconsiderate to their loyal customers to drop the price by so much and so soon.”
If they’re so greedy, why are they giving people money back? When has any tech company ever done that? They committed no crime; they owe iPhone purchasers nothing.
Also, what evidence do you have that Apple directors conspired to “screw” it’s most loyal customers? You not only claim them malevolent but ALSO incompetent?
“Seriously though, what are you, 12? Not only is your logic comletely [sic] flawed and missing the point…”
Where are the flaws? Support your claim.
“in writing that post you managed to simultaneously make yourself look like a jackass and remove any chance you had of being taken seriously by acting immaturely.”
I retract only the first sentence in the earlier post; it served only the purpose of insult and was uncalled for. The rest of my points I am quite serious about. Letting your emotions make your financial decisions is a terrible philosophy to employ.
You know why Apple can give $100 back? Because it probably costs them about $150 to make the phone so they make so much profit. I’ve read that the Shuffles cost Apple $12 to make and they retail for $79. They buy in bulk, they screw over the people they buy from and then jack up the price. I was a very loyal Apple fan (an Apple zealot actually) but if they planned this, thats pretty low. The $100 is just to make them look like the good guys again but they can afford that no problem. Even so, users should still be happy that they’re getting something back.
You know why Apple can give $100 back? Because it probably costs them about $150 to make the phone so they make so much profit. I’ve read that the Shuffles cost Apple $12 to make and they retail for $79. They buy in bulk, they screw over the people they buy from and then jack up the price. I was a very loyal Apple fan (an Apple zealot actually) but if they planned this, thats pretty low. The $100 is just to make them look like the good guys again but they can afford that no problem. Even so, users should still be happy that they’re getting something back.
“…but if they planned this, thats pretty low”
Ironically it seems that’s the one thing that everyone can agree on but nobody can prove. It’s just the nature of the beast, I guess.
“They buy in bulk, they screw over the people they buy from and then jack up the price.”
Are they manipulating the market? Are they committing monopsonistic crimes?
I fail to see how engaging in voluntary exchange “screws” people. I know I have some radical ideas but I never thought this would be one of them.
This is why they dropped the price…it has nothing to do with making it more affordable. It has everything to do with clearing inventory before they release the new 3G model:
http://news.yahoo.com/s/nm/200…
“They buy in bulk, they screw over the people they buy from and then jack up the price.â€ÂÂ
when you start buying in bulk… perhaps you can have them at $12 a piece… until that time pay for the distribution, the marketing, the salaries of employees selling, the lovely new Apple Retail shops… the list goes on and on…
its called the market… did anyone actually think that Apple may have assessed that at the $599 price point they perhaps werent selling as many as they were actually expecting (forget about the public announcements, im talking about the internal targets) and they were probably LOSING money on the 4Gb model, hence the product cut – so perhaps the price cut came to increase the demand for the product, as well as some cost saving through getting rid of one product…
I’m not sue .. but I really don’t Steve cares much about the money …. his an eccentric who loves inventing and seeing the products sell because he likes them and computer technology ….. he also has to keep shareholder happy ( by law I guess) …. but he’s made some of them unhappy by the pay-backs. Also I think he’s genuinely trying to keep the loyal fans happy … beyond what any other CEO woulsd do . I guess iPhones sales started a stall and he wants to kick start it again during the holidays .. I’m waiting … until the hacks have been proven … then it may be economical to have this great phone … I’d never pay 60$ a month to use a for a phone. With the new price and the hack … you’ve got what you want. Sometimes you have to pay a bit extra .. if you can’t wait
Forgetthe money
Don’t think that this was a sudden decision while Jobs was on stage. All these things are planned by a corporation months in advance. It’s called marketing. Don’t just look at what happens today and try to guess what is happening. Look 6-12-18 months down the road. New product from Apple, test the waters to see what price point the market will sustain. Ok, great, now, lets grab some market share by lowering the price. Now, let’s introduce a higher capacity/better functioning version at the initial price point of $599 (your upcoming 16gb iPhone).
Apple doesn’t make money selling tons of iPod shuffles. Apple makes money selling tons of $400 iPods and $4000 desktop computers. The low end of the market is only to invite you in by testing the waters. If Apple gave away iPod Shuffles which cost them $20(?), it would lead to increased traffic at the stores and within a year, most of those folks would come back and purchase an iMac, or another iPod and the fan base grows from there.
This guy has it right (amusingly so), http://www.idisappointment.com…. The thing was overpriced to start so it was really a deserved payback to those that bought it.