IPhone Price Drops

Four Mistakes Apple Made With The IPhone Price Drop

Don't get us wrong -- price cuts are a good thing. But yesterday's $200 iPhone price drop has left many current iPhone owners seething. Based on a lot of what we saw at the Moscone Center yesterday, it's clear that Apple made the following four mistakes:  

1. Lack of Tact
Most consumers are aware of how a product's life cycle works--but let's face it, few want to be openly reminded of it. It's a harsh reality, but the fact of the matter is that businesses essentially view consumers as people whose passions, interests, and material needs can be forecasted, quantified, and exploited for maximum profit. It's not unfair that Apple views its most loyal customers in the same fashion, but it's incredibly tacky that the company made that fact so palpable with its price drop. Seeing the evolution of the iPod is great, but it's not going to cause us to forget the $200 price difference.

2. Rushing the Timing
With more than 100 days to go before Christmas, we're not sure why yesterday's events took place ... well, yesterday. Even though the year is winding down, holiday shopping hasn't really kicked off yet, so one has to wonder whether or not Apple has yet another trump card and Moscone Center trip up its sleeve. It's clear that the company wants to get the iPod Touch into people's hot little hands as soon as possible, but cannibalizing its own business so quickly makes the company seem both short sighted and sloppy. 

3. Slashing a Little Too Much Off the Price
Say what you will about the folly of early adoption -- we've got a few who willingly paid the "stupid tax" within our ranks. But a drop of $200 after just 66 days means that the iPhone decreased roughly $3.03 a day in retail value between launch and yesterday's announcement. It's no secret that electronics drop in price over time, but such a deep and hasty discount makes trying to quantify the realistic retail value of the hardware confusing. A mistake of this nature just encourages pricing paranoia.

4. Showing Obvious Contempt for AT&T
According to our AT&T Wireless tipsters, the only notice employees on the front line received was an internal email and a text message -- and they apparently got the news shortly before the announcement. Even though Apple is known for shrouding its pricing in secrecy, not giving AT&T an adequate amount of time to prepare is just bad business -- both for a company that is tasked with scrambling to keep up and its customers who end up erroneously directing their ire towards the wireless provider. Paired with how Apple has also announced the Wi-Fi iTunes store and the introduction of its own ringtone platform, one can't help but notice how AT&T and its customers seem to be getting the short end of the stick repeatedly.

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