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Apple Gives $100 Store Credit To iPhone Customers
MooRogue writes "In an open letter to all iPhone customers, Steve Jobs responds to hundreds of emails from upset iPhone customers. Apple will be giving early adopters who are not receiving rebates or any other consideration $100 store credit at the Apple store.
Details will be posted on the Apple website next week"
Say what you will, but what other company figurehead in recent memory has came out and apologized for other people's willingness to spend their money?
Maybe it was all planned out from the day one though, and if that's the case, I wish Steve would run for the next presidential election. Talk about planing for every contingency...
If you don't know what AltaVista is (was), get off my lawn.
wtf is wrong with these early adopters who complain about paying more? they knew from the beginning that apple will drop prices. whiney bunch of pussies
How can you "lose" $100? Does Steve Jobs mug you on the street? You paid $599 for a working product, end of story. Early adopters pay out the nose for bragging rights, film at 11.
Auto-reply to ACs: "Truly, you have a dizzying intellect."
They didn't "lose" anything. That is just the price you pay for having it a few months before people are willing to wait. If your stupid enough to waste $600 or so on a phone, it your own fault.
Funny how that's vastly different from refunding $100, or even the $200 the phone users are out -- Apple will simply lose the production costs of the items sold under that store credit (not to mention gaining profits from any accessories bought as a result beyond the $100 credit). It's not to say such hardware prices wouldn't normally fluctuate, but a month or two is a bit quick for something that's seemingly so successful. I wonder where to draw the line between truly normal price decreases, and jacking the price on something you know will sell like hotcakes...I'm not all that business-savvy, so feel free to educate me if there is indeed such a line.
Quiz: True or False -- On a scale of 1 to 10, what is your middle name?
If you give $100 Apple Store credit to the sort of people who bought an iPhone on iPhone Day, that's all the excuse they need to buy a new iPod, or a MacBook or another iPhone.
What would you have bought with a credit for your SE, a IIe?
What I'm listening to now on Pandora...
Hell, if you pay $400 for a phone, you're a complete moron.
The world's burning. Moped Jesus spotted on I50. Details at 11.
It's not just a phone, so it's hard to evaluate the price. Early customers thought they could trust Apple about the fact that the iPhone was worth $600. Now they lost their trust in Apple, and Steve Jobs is trying to buy it back.
No one has mentioned it but it is a great move by Jobs, $100.00 "Apple Store Credit" probably costs them $40.00 and in addition it is that incentive mentioned earlier. So,in no way does it cost Apple 100.00 to look like they are meeting Joe "early adopter" halfway.
"Computers are a lot like Air Conditioners" "They both work great until you start opening Windows"
Years ago, when the HP LaserJet 4 first came out, I bought one at Fry's for $1600. Three weeks later, they were selling it for $1200. I didn't whine.
Who hasn't bought a computer, a flat screen tv, or a car where there wasn't a discount or price reduction a few months later? Why would anyone expect the iPhone to be exempt from economics?
Clearly, Apple is doing the right thing as far a public relations are concerned, but the idea that you are entitled to a refund for something you bought two months ago is ridiculous.
There wasn't a 16GB Model at the $599 price point.
I was annoyed, but not 'urge to kill rising' simpsons style or anything. Just seemed cheap that I've barely gotten my second bill for it and yet somehow they can drop the price $200 for no reason other than because it makes sense.
I'm no stranger to buying tech, I paid $499 I think it was for the Treo 300 when it came out day one. It didn't get a discount until probably six or so months later. But 10 weeks? Bit much but meh.
As a rock-in-roll Physicist once said, No matter where you go, there you are.
For the same reason that I can't go to Intel and ask for $200 after every round of price drops. If someone chooses to buy a product he or she must make a decision if the purchase is good value. Yes= buy. No= don't buy. Just wait. Early adopters thought the price was right at launch. Just because a new, better deal comes along it doesn't change their initial decision; the purchase was good value. Surely they knew a price drop was innevitable, granted perhaps not so soon or so much, so any free money is a terrific deal.
As Mr. Jobs so delicately points out these people technically aren't entitled to anything but Apple wants to keep them happy. If they were given all $200 then they get the benefit of being the first to have an iPhone for nothing. People who decided to wait for a price drop would be a little upset if there is no 'early adopter penalty', and that they could have been using an iPhone all this time if only they had known they could get $200 back.
Really, I can understand being upset, but anybody who thinks/says that has the wrong person in mind when they're thinking of who sucks.
Certainly not the normal "Please piss off, and have a nice day." response of:
"We're sorry to hear of your disappointment with our product.
Unfortunately, we have a very large volume of customers who
are very satisfied with our products, at the the prices
we offer. We do our best to please every customer"
.
boycott slashdot February 10th - 17th check out: altSlashdot.org
Telling a bunch of geeks that they're morons for buying tech gadgets on a site specifically targeting the people who would purchase those items just seems...moronic. Or did you forget to click AC?
Intel's a great example, considering they just re-priced their Xeon line so that the quad-core chips cost what the dual core chips of the same clock speed had cost the day before. How many end users that purchased quad core processors the day before do you think saw a refund of any of the several hundred dollar difference? What about the people who bought the dual core chips the day before? Is intel going to send them a free core?
If a product is worth the price to you when you pay for it, then you should be comfortable with price changes after you made the purchase.
An item will sell for exactly what both parties (seller and buyer) believe is a fair price at the time of sale. Those that claimed that they got ripped off are just complaining that they fell for the "early adopter" technolust that comes with the launch of a new gadget. Instead, we should be cheering on those who couldn't afford one before but can do so now; "Hey, good for you! You're getting a deal!" instead of "Oh screw Apple, they let me buy something on my own free will at a higher price! Maybe I can join up with those non-user-replaceable-battery whiners and bitch about my lack of self-control and impulse buying."
And for the record, I paid $600 in early July, and feel that it was worth the price I paid. Mind you, if somebody wants to give me some form of credit after the fact, I won't turn it down, but I won't bitch about being allowed to spend my money on my own free will, either.
Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
What I find annoying about Apple pricing (or rather "potentially" annoying, as I'm not one of their customers) is the centralized, tightly controlled pricing, combined with a strategy of infrequent price changes. The cost of a flashy new CPU or videocard will start high but drop steadily day by day (with some fluctuation). With Apple, they keep their cards close to their chest and then Wham! the thing you bought yesterday depreciates 30% overnight. It's perfectly reasonable for customers to be annoyed by this, because it's Apple's secrecy and pricing strategy that create the problem.
Think about it - if this had really been planned, the best timing would be to announce the credit a week or two AFTER the new iPods go on sale. That way a lot of customers buy new iPods, then head back to the Apple store for accessories after they get the rebate. If Apple was as devious as people claim, issuing an announcement about a rebate ahead of the actual rebate is a terrible non-profix-maximizing idea.
Like everything else in life, the reality is probably between the two extremes - Apple probably thought recently about deep price cuts, and held in reserve the strategy of a rebate if complaints about the price drop from current owners were loud enough (which they were). Apple is a company yes, but Jobs is not a Ferengi (or Mother Teresa in a turtleneck).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Me, I'm against Global Warming and Global Whining.
It doesn't matter to me what Apple's costs are, it's still something $100 cheaper to me. I plan to use it on Leopard which I was going to buy anyway, as I'm sure a lot of people will - how is that not a direct and pure loss for Apple since every dollar of purchase went to paying off R&D on the new OS?
Some things might go for things Apple paid less for, but I just call that Win-Win. Since Apple didn't have to do anything, something is way better than nothing.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
When the iPhone launched, it sold out at both the nearby Apple Stores. If you weren't in line on Friday, you couldn't get one on Saturday. One of my co-workers waited until the middle of the next week, called a couple of stores to check inventory, and just walked right in and bought one.
Those people standing in line weren't just standing in line to get an iPhone. If that's all they wanted, they could have waited a week or two for the second shipment to arrive. What they stood in line for was the opportunity to have it first. They "paid" extra by waiting around for several hours when they could have been doing something else so they could get an iPhone before anyone else did.
Whatever the motivation -- bragging rights, enthusiasm, impatience, etc. -- there is a cost to getting there first. Conversely, there is an opportunity cost to biding one's time: Anyone who waited for the price to come down has gone the last few months with no iPhone.
This just encourages whiners and the worst kind of whiners. The people up in arms about this are not the people who were unwilling to pay $200 more. Clearly, they bought the phone at that price. What they are up in arms about is that a cheaper phone may mean that other people will be able to afford them, therefore their status symbol is not as exclusive and their feeling of superiority is diminished. The rebate doesn't solve this problem at all and will not please them anyway.
Psychology aside, from a business perspective, there's absolutely no justification for Apple to give a retroactive discount past the return period (see below). When you buy something, you buy it for a price at a particular point in time. If you want to wait and see if the price will go down, you may do so. If it's worth it at the set price at that time and you buy it, short of manufacturing defect, you have absolutely no claim that you should later get it at a lower price. It violates the social contract to demand otherwise. Would if Apple said you should pay them $200 more for the phone you already bought?
The only reason that some merchants have retroactive prices is that the product is still within its return period and it's not worth processing all the returns as people re-buy the product. This is the only case where it makes any business sense to retroactively price a product like this.
Apple just beat the scalpers at their own game.
I gained two months of phone use over someone who has waited; and I have made good use of the phone in the last two months, it's been way more useful to me than the previous phone I had. Well worth the slight extra amount I paid.
After all, any electronics purchase is a gamble - you never know when prices will be cut. But it's a gamble you cannot lose if you like what you bought and you buy at a price that works for you.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Why not cut the price in November? Because it's September in 2007. The holiday season has already begun. By 2011 it will be starting in August.
At my age I find coming up with a witty signature too exhausting.
Eh, it was on the front page of USA today (distributed to the mass market) and on the front page of the Wall Street Journal (distributed to the affluent jackasses who actually bought this thing for $600). I'd say this news outshadowed the new iPod, which probably wasn't their intent.
The way I see it, the price drop isn't the story, it's the previous high price. That just feels like they just wanted some free revenue.
HI, MY NAME IS ISAAC.
> Now they lost their trust in Apple, and Steve Jobs is trying to buy it back.
No, there is some PR aspects to this deal but Apple didn't need to do this. It's a way to make sure they keep happy customers. People were lined up to drop 6 portraits of Ben Franklin for a toy. Being a phone anyone (ok, Miss Hilton probably doesn't have the brains to know better but with her money she can afford not to care) with any business in those lines should have realized the price would drop before the year was out. It's a cell phone people!
I certainly ain't no Apple fan, anyone looking at my posting history can see how many times I have rated flamebait/troll for failing to be affected by Steve's Kool-Aid, but when they do something cool I gotta be honest and say that too. And tossing half the price cut back to every buyer and the full difference to everyone who bought in the last two weeks is just high class.
Democrat delenda est
I laugh at you, sir. You're a sad, sad human being. Have you considered that are people for whom $400 isn't a small fortune? You can mock people for making a good living if you want, but it seems kind of ineffective.
"You have a lot of money and can afford nice things, you LOSER!" doesn't have quite the sting you seem to think it does.
The price cut was planned but not for the reasons analysts are speculating.
The price cut was to compete with its own product, the iPod. The goal is to convert iPod users into iPhone users. And really, at that price why not? People are used to paying $200-$300 for their iPod, so the iPhone now looks like a very good bargain.
With that, apple adds revenue streams from ATT, even better integration with the iTMS, and the opportunity for even more revenue streams through new WiFi/Edge services (Starbucks, Ringtones, etc). Freakin' Brilliant.
An item will sell for exactly what both parties (seller and buyer) believe is a fair price at the time of sale.
Please refrain from introducing basic economic concepts into this discussion. You could start a dangerous trend.
But seriously, for priding ourselves on our supposedly rational behavior, geeks can often be just as irrational as anyone else.
Read the EFF's Fair Use FAQ
No, there is some PR aspects to this deal but Apple didn't need to do this. It's a way to make sure they keep happy customers [...] tossing half the price cut back to every buyer and the full difference to everyone who bought in the last two weeks is just high class. Indeed. I'm often shocked by how much more open hostility there is on Slashdot toward organizations that try to treat their customers well. Google is constantly accused of being "evil" for
Over and over we see the same thing. Companies that do right by the community are attacked. Cutthroat and downright evil companies that just ignore us (G.E. comes to mind) are ignored in turn. We're training the corporate world to do us no favors.
That's not different from a lot of high-ticket consumer products. Want to by a new Lexus from the dealership, or a tailored suit, you'll find the pricing just as foggy. If you want to buy a computer priced like gasoline, buy a Dell, but they're just as weird and capricious about their prices, they just hide their actual price in a vast system of rebates. Apple's pricing is also supposed to be simple to make their market segmentation simple. If I'm looking for a cheap iPod, it's easy to see which one's for me and compare it (well, not as easy as it has been, but still). I don't have to wade through four or five different lines with different price levels, rebate options, compatibility, capabilites, form factors, etc... There's both a downside and an upside to going with a single vendor.
With Apple, they keep their cards close to their chest and then Wham! the thing you bought yesterday depreciates 30% overnight.I know you picked that number off a tree, but just about any computer (or car, or expensive resellable item, for that matter) depreciates 30% the moment you take it out of the store. I would also direct you to eBay to compare the relative resale values of 2 year old Macs, compared to 2 year old Dells or ThinkPads.
Don't blame me, I voted for Baltar.
Wham! the thing you bought yesterday depreciates 30% overnight.
Depreciates? Were you planning on selling it?
I don't really think there is a market for used cell phones or for used ipods...
No sig for the moment.
um, slashdot is supposed to be all knowledge, but yet, i see nothing on precedent...
apple is known for doing stuff like this, e.g. aperture. the situation was somewhat different, but the response was generally the same, offer refunds to early adopters.
this is almost 100 million dollars in good-will... and pure apple. in fact, expect some lawyer to devise a class action suit on behalf of aggrieved shareholders -- angry about apple being too gracious with customers.
True, true. Apple will miss out on, oh, let's call it 400,000[1] credits used * $100 = $40,000,000 of potential unrealized revenue.
However, they don't just give that money up and get nothing for it:
* They get great publicity that makes them appear responsive to customers - the story is all over the non-tech news.
* They restore a lot of goodwill among early adopters, who are an important crowd for Apple.
* It's a great loss-leader to get those people - known big spenders - back into the store to spend more money.
* If it's used on Apple software or hardware, it will increase their installed base and marketshare.
So yeah, they're going to miss out on $40 million, but they get value for it that's probably better than the same amount spent on advertising in any media.
[1: Assuming they've sold 800,000 eligible units and 50% of buyers acquire and use their credits.]
With reasonable men I will reason; with humane men I will plead; but to tyrants I will give no quarter. -- William Lloyd
They must be worried about the iPhone in order to do something as crazy as that. Dropping the price of the phone 2 months after it's released by 33%? It's bad for several reasons but mainly because it pisses off the early adopters big time as evidenced by the emails/rebate. The $100 will appease them, however, they will be extremely gunshy to jump on the boat again, that's for sure. One of my friends who bought the iPhone said exactly that, he will wait a few months now and won't be fooled by Apple a second time.
And they know all this because they are savvy business people at Apple. Compare the iPhone to the PS3. More people bought the iPhone than did PS3 at the same price, yet it took Sony 1 year to get a $100 price drop as opposed to Apple's price drop.
So the only reason to me is that it's desperation. I'm guessing that report about how only 136k people actually signed up must have them pretty worried and they need to reach a critical level sooner.
Me personally, I smell blood in the water. I'm waiting for the price to drop even further before I begin to consider buying it. It would be interesting to see how many people feel the same way and if that will actually curtail pickup of the iPhone until closer to Christmas.
Thanks to this incident, it is highly improbable that Apple will ever be able to come out with something innovative and new that is a success ever again... because if they try to, a lot of people will hesitate to buy it right away, thinking that perhaps Apple might lower their price in the not-too-distant future. The result will virtually inevitably be a marketing failure.
File under 'M' for 'Manic ranting'
Strange logic you've got there. The apple online and retail stores sell all sorts of things, many of which even a non-apple-owner would find useful. At competitive prices. The thing you're also missing, is that if I've bought an iPhone (I have), I'm likely to buy other things because of direct personal positive experience with the products. Did I deserve to get a free $100 bucks off my next purchase of any vaguely IT-ish product? Not at all. Did I expect it? Nope. Am I gonna spend it on more Apple stuff? Sure. Was I gonna buy that stuff _anyway_? You bet. So tell me again how I'm only gaining $30 or $40? Seems to me it just made my next iPod purchase go from $300.00 to $200.00...
I agree with what someone else said though - if you want things on the day, you pay extra. It's always been the way, though maybe 2 months after release is a bit soon for a price cut like this. Jobs cites the holiday season as a reason - why not cut the price in November then? At least that lessens the chance that every iPhone owner is going to want your head impaled upon a pike so they can wave at it in a funny way.
I find it odd that people are treating Apple poorly because they're (a) dropping the price, and (b) giving early adopters (adapters?) something that is completely unexpected but a nice gift. Somehow they're the bad guys for doing this. Not saying you specifically, but an awful lot of that sort of thinking in this thread.
It's a good phone. It integrates the various apps well. One-button checks for traffic, weather, stock prices, email, etc etc etc. The workflow is well thought out and intuitive. Yeah, I can do all (well, most) of this same thing with my Treo but, the UI on this thing is so much better. And my monthly contract with AT&T is 20 bucks a month less than I was paying Verizon. I'm not seeing a downside.
They don't even need the serial number. Had a problem with mine, a row on the touchscreen went dead. Called, and after going over my troubleshooting steps (reset, reset-all, re-install firmware), within 5 minutes the tech (who spoke English and seemed to be in the same country I am) agreed "Yup, it's broken. Sorry about that. What's your phone number?"
Next morning FedEX dropped off a loaner (free). Two days after that my phone had been replaced with a brand new (by appearances and packaging) iPhone. Total cost to me: 0. Total time between calling Apple support and having a fully functional iPhone: about 12 hours. Time spent on the phone? 10 minutes, max.
They do support well. People who say "Meh...it's just a phone" are the same type who see a luxury car and say "Meh...my yugo gets me to work just fine".
a minority of fanatics who believe that iPhone costed every single dollar of those $600 they paid.
I'm not sure those people are wrong.
I've seen lots of stuff that focuses on the cost of the parts. These people seem to act like it was inevitable that if you dumped enough of the specified parts into a vat together that they'd eventually inevitably produce an iPhone.
I've only seen speculation about costs for manufacturing/assembly, software development, and hardware R&D. Probably because only Apple really knows. But I'm sure those costs are there. Perhaps others that aren't immediately obvious.
This isn't to say there wasn't a good margin built into the iPhone on top of that. However true it actually is that Apple actually is a damn smart company that is in fact driven as much by a desire to produce quality products as the desire to reap profits, it and its shareholders also probably desires to reap profits. They probably knew they could command the price of early adopters and many would pay it.
It's also possible that high price helped them recover development costs, and with that done, they're free to drop the price.
It's also possible the high price likely keeps it in the hands of people who want one so badly they're willing to overlook some Rev A problems.
It's also possible the price itself was intended as a quality/caché signal.
Tweet, tweet.
Having maps and email and web browsing on hand, has in fact been worth $100 over two months (since I was going to buy Leopard anyway, the $100 credit is real enough to me). I have made excellent use of it over the last two months.
And I do not "flash it around". I hate even admitting I have some expensive phone. I generally try to use it when it's not obvious I have one (except answering calls of course, you don't get to pick exactly when a call will come).
Your mistake, as has been the mistake of Apple haters since the dawn of time, is in think any Apple product is about looks when it's all about features and usability.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Instead of the story being "Apple lowers price, because of dismal sales", the story is about how people who paid too much are pissed and are getting a rebate.
Maybe when it hits $200 and works with t-mobile out of the box, I'll consider buying one.
I just sold a 3 year old iMac (screen-on-a-stick model). It was only 1GHz, 768MB, 30GB. 17" display. I got $525 for it... plus shipping. This was actually lower than other bids I had seen close in recent weeks. I've seen 800MHz Imacs go for over $600, in August of this year!
You spend more for the machine than competitors, yes. Part of that is sheerly for the aesthetic of the beautiful machine, a small part for bragging rights, and the rest for the solid tech inside the box. Apple regularly, and suddenly drops prices when they add new models. This is typical of many companies. If you know there's a Mac Keynote coming up in the next 30 day, WAIT!!! Don't buy anything. Or at least make sure where you are buying it from has a 14-30 day price match guarantee.
Outside of that, what's your mac worth after 3 years compared to something else? I have a 1 year old $1100 IBM business notebook. Core Duo, advanced graphics, SATA, and more. on ebay, it's worth about $450... A 2 year old Gateway gaming notebook (my wife's rig) was $1300 new (after rebates). It's worth about $250 on ebay right now. My mom's 2 year old powerbook? Still worth 50% of what she paid for it... In fact, it's worth more used than machines with faster processors cost new today.
Add to this the hundreds of dollas I've saved in not needing AV or spyware software and that only 1 of the 11 Mac's my family has owned since 1984 needed anything more than a hard drive replaced, and that was storm damage, not really Apple's fault there. Every mac we have ran for at least 5 years before being replaced, including a Mac Classic we bought in 1988 that STILL works today, an original blue iMac that failed back in March of this year (7-8 years old?) and an ols LC II I got in 1991 that ran until 1997 when I sold it for $400 (yes $400 for a $1200 computer that was 6 years old...)
I applaud Apple for giving $100 in credit to all iPhone adopters. 2 months was a BIT quick, I'll admit, for such a drastic price drop. Honestly, I expected a $100 drop upon the intro of the new iPods as I was expecting the touch to be $100 more expensive than the classic iPod (note to Apple, you set the price too low there, I would have paid $400 for it without blinking) I expected a discount from AT&T of another hundred by mail in rebate in November and doubling that to $200 rebate in January.
Apple will be in trouble shortly as they actually won't be able to move too many iPhones on their own once their exclusive contract ends and other vendors start pushing iPhones with big rebates for big contracts. Sure, if you have a contract and want an iPhone you can just buy one outright for $400 or so, but anyone who is changing service contracts might be able to get one for $100 or $200 for signing up for a contract they needed anyway. Sure, Apple gets the kickback, but at OEM/wholesale pricing, not full price, so their money train will be stopping shorlty.
There is no contest in life for which the unprepared have the advantage.
Yeah, but that $100 iTunes gift card (just to pick something) would still have cost ME $100, whatever their costs.
Secondarily, no one held a gun to our head and forced us to buy anything. Apple made an exceedingly cool product and we weighed the "cool" and utility against $600, made a decision, and bought it. They could just as easily spent millions making a technological flop like the Zune, in which case all of those R&D and marketing costs would have been a total write-off. They gambled and rolled the dice.
You may also notice that they made an Apple iPod HiFi dock... that just disappeared from the store. They made the AppleTV, which isn't exactly blowing off the shelves. In fact, I was just in a store yesterday and saw the new nano. Don't like the form factor, build quality, or the interface. So I'm not getting one, nor recommending them, nor buying them as gifts. Maybe other people will make the same decision and do the same. Maybe not. The point is that people don't buy EVERYTHING Apple makes just because it has their logo on it.
On the flip side, my MacBook Pro is the best notebook I've ever owned. OS X makes other most OS's look like they were designed by brain-dead committees (if that's not redundant). Aperture and Final Cut are some of the best tools on the planet. And if a truck rolled over my iPhone I'd be back in the store in a second buying a new one.
Fan? Yes. But I'm only a fan for as long as they continue to make great products.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.