Okay, this is all just speculation, but... Why cut the price after just two months? Why now? I know Jobs said the reason is they want to put more iPhones in stockings, but I can't help but feel it goes deeper than that.
Most seem to agree that this sort of abrupt price cut is fairly unprecedented for Apple. Drop the price 30% after just two months? Maybe as Jobs said, that's just "technology." But for a company that enjoys a fairly loyal customer base (till now), they had to know it would cause a huge uproar. It doesn't seem they'd do it unless they had to.
So when was this decision made? Before June 29th? Unlikely. Why not just price it that way from the start and sell even more?
Very likely something changed in the two months since the launch. Maybe they didn't sell as well as they'd forecasted, and this price cut was meant to find the market sweet spot. Could very well be.
But maybe there's another reason. Maybe it has to do with the foreign partners Apple's supposedly partnered with. In the last two months, they have supposedly had conversations with potential European partners. The Financial Times wrote on August 21st that Apple had selected three partners. But since then, no official announcement has been made. (Though the article mentions, "The operators are set officially to announce the partnerships at the IFA trade fair in Berlin at the end of August.")
So what did these potential partners tell Apple? Did they perhaps advise them that Europeans used to 3G technology would not pay $599 US for 2G technology? And if so, did Apple then decide to first reprice the phones in the U.S., then announce that same price in Europe?
Maybe the dialogue went something like this...
Euro Partners: "Nobody will pay $599US for a 2G phone. They just won't." Apple: "Well we don't plan to release our 3G phone till 2008." Euro Partners: "Then cut the price. If you offered a 2G phone for $399, that might work." Apple: "We can't do that. We'd piss off about a million customers who already paid the higher price." Euro Partners: "You want to sell in Europe, that's what it'll take." Apple (grumbling): "Okay. Deal." Euro Partners: "Great. We'll announce in Berlin at the end of August." Apple: "Whoa. Hold on there. Less us announce our price cut first, then you go. We'll mention it on Sept. 5th at our "Beat Goes On" thing. Maybe everyone will be so amazed with the new products that they won't care as much."
We may never know if that's what happened, but I suspect it's a good bet there is some sort of reason that goes beyond Christmas stockings. After all, has there ever been a "Steve-note" in which this many new products were released, yet the predominant story has been how many angry customers Apple now has? Is that really the PR Steve wanted yesterday? Doubtful. I suspect their hand was forced.
Most seem to agree that this sort of abrupt price cut is fairly unprecedented for Apple. Drop the price 30% after just two months? Maybe as Jobs said, that's just "technology." But for a company that enjoys a fairly loyal customer base (till now), they had to know it would cause a huge uproar. It doesn't seem they'd do it unless they had to.
So when was this decision made? Before June 29th? Unlikely. Why not just price it that way from the start and sell even more?
Very likely something changed in the two months since the launch. Maybe they didn't sell as well as they'd forecasted, and this price cut was meant to find the market sweet spot. Could very well be.
But maybe there's another reason. Maybe it has to do with the foreign partners Apple's supposedly partnered with. In the last two months, they have supposedly had conversations with potential European partners. The Financial Times wrote on August 21st that Apple had selected three partners. But since then, no official announcement has been made. (Though the article mentions, "The operators are set officially to announce the partnerships at the IFA trade fair in Berlin at the end of August.")
So what did these potential partners tell Apple? Did they perhaps advise them that Europeans used to 3G technology would not pay $599 US for 2G technology? And if so, did Apple then decide to first reprice the phones in the U.S., then announce that same price in Europe?
Maybe the dialogue went something like this...
Euro Partners: "Nobody will pay $599US for a 2G phone. They just won't." Apple: "Well we don't plan to release our 3G phone till 2008." Euro Partners: "Then cut the price. If you offered a 2G phone for $399, that might work." Apple: "We can't do that. We'd piss off about a million customers who already paid the higher price." Euro Partners: "You want to sell in Europe, that's what it'll take." Apple (grumbling): "Okay. Deal." Euro Partners: "Great. We'll announce in Berlin at the end of August." Apple: "Whoa. Hold on there. Less us announce our price cut first, then you go. We'll mention it on Sept. 5th at our "Beat Goes On" thing. Maybe everyone will be so amazed with the new products that they won't care as much."
We may never know if that's what happened, but I suspect it's a good bet there is some sort of reason that goes beyond Christmas stockings. After all, has there ever been a "Steve-note" in which this many new products were released, yet the predominant story has been how many angry customers Apple now has? Is that really the PR Steve wanted yesterday? Doubtful. I suspect their hand was forced.