In recognition of the enormous giant middle finger that Apple displayed to folks who paid $599 for their iPhones, only to have the price of the desirable device cut by $200 two months later, Apple is giving early iPhone buyers $100 in Apple store (online and brick-and-mortar) credit. In an open letter from Steve Jobs posted on Apple’s website, the CEO said “we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price,” in explaining the decision.
The $100 bucks could go a long way to salve the wounds of Apple’s biggest fans, i.e. those who bought the iPhone early (I’m one of them.) The unexpected price cut, while no doubt the right decision for Apple’s pursuit of stepped-up holiday sales, was a true slap in the face of iPhone fans everywhere. It was a penalty, of sorts, for buying the devices early.
Even better than the $100 is an apology from Steve Jobs for the thoughtless move. “We apologize for disappointing some of you, and we are doing our best to live up to your high expectations of Apple,” he wrote.
Although not as good as the full $200 savings that new iPhone buyers will get, the $100 store credit, not to mention the apology (saying “I’m sorry” goes such a long way) should help salve a lot of hurt feelings.
Update: This move isn’t an expensive proposition for Apple, although it could slice up to 18% off the revenues Apple has generated from the iPhone so far. Assuming that Apple has sold around 875,000 iPhones to date (the company claims it is on track to sell one million by the end of September), at an average price of, say, $550 (factoring in some sales of the 4 GB model at $495), then Apple’s iPhone revenue so far is around $481.25 million. The $100 for each of the 875,000 iPhone buyers equates into a total of $87,500,000, or around 18% of sales.
Of course, Apple is giving “store credit,” and that could have something of a counterbalancing boost to revenues. Get people into the store and they’ll spend, maybe a lot more than the $100 credit. Another countervailing benefit to Apple: the $100 reflects retail dollars. Apple’s wholesale cost could be far less.
Cynthia Brumfield at 4:00 PM|Comments(0)
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