Apple Legend Woz Blasts iPhone Price Drop

Stony Stevenson writes "Apple cofounder Steve Wozniak Saturday blasted Steve Jobs' decision to drop the price of the iPhone by $200 just two months after the product was launched. Said Woz: 'Everyone expects technology to drop in price. The first adopters always pay a premium. I am one of them. I am used to that. But that one was too soon, too harsh ... A lot of people from Apple, even a lot of people that worked on the Apple Lisa and Macintosh computers in the beginning now work at Google. The thinking over at Google is very much like early Apple days. The fact that they give people time off to work on their own ideas is exactly matches some of the things that made Apple great. I wish Apple did that.'" We just discussed the price drop last night.

Comments

Supply and Demand

[seanadams.com]

I work in the hardware business and I can tell you it is difficult enough to get enough inventory built for an ordinary product launch, but for what has been called the most successful CE launch _ever_... there is just no way they could have met demand without boosting the initial price significantly. And the problem with keeping the price high too long is that your momentum will dry up, and people won't even be paying attention any more by the time it does drop.

You can call it gouging if you want, but what if they'd instead just run out of stock immediately? Think "tickle me iPhone" - I don't think consumers would have been impressed by that.

Jobs did exactly the right thing. Price no lower than where you meet demand, and only once production has ramped up (which usually takes about two months - go figure) THEN price it at the sweet spot. Also consider seasonal factors which made it necessary to do this before the Xmas shopping season, which for the gadget industry begins right now.

I don't think that ANYONE, not one single person, who can afford a $600 phone and 2yr commitment to a $100+/mo plan, has a valid gripe about paying $200 extra up-front to be among the first to own it. If it was worth buying when you bought it, who cares what it sells for now? Were you hoping it would keep it's resale value or something?

Re:Supply and Demand

[QMalcolm]

It's true. In the end, you were paying $600 for a phone. You can also get phones for $50. By paying WAY more, you either want to get it first or have the absolute best phone possible. Your phone still works. You got it first. If that $200 will actually harm you financially, you shouldn't have bought a $600 gadget in the first place.

It sucks, but there's nothing WRONG about it.

Re:Supply and Demand

[not-quite-rite]

The pricing seemed quite a smart way of letting market forces apply feedback in the control loop for the sale of the iphone.

As much as people cry about the price, it means that those early adopters payed a premium for what they wanted(an iphone straight away gimme gimme gimme), and those slower to take it up, will also buy and feel better about it due to percieved value.

(I'm also happy because it means all the US early adopters took the brunt, while the rest of the world reaps the rewards :P)

Re:Supply and Demand

[RonnyJ]

I don't think it's just the loss of $200 that bothers everyone, the price drop also makes the product seem a little less 'exclusive'.

(I'm sure that's not the factor most people would be annoyed about, but I'm sure a fair few people bought it largely as a status symbol.)

Re:Supply and Demand

[amRadioHed]

A fool and his money are soon parted. Sure Apple accepted their money, but who wouldn't?

Re:Supply and Demand

[Dr. Slacker]

Give me a break. A low price and lack of inventory hasn't hurt the Wii.

Re:Supply and Demand

[onetwentyone]

My point is that a lot of customers are lower-middle class who are spend happy on credit they can't support. This is a major problem is North America, and companies can't help but to take advantage of that. You're telling me companies should be responsible for the self control and fiscal responsibility of the individual? Sorry but if someone puts themselves in a bad financial position through unnecessary "for me" purchases, they have no one to blame for themselves. Proper budgeting, hell even SIMPLE budgeting, should be something we teach our kids in school from early to out.

Haha.

[kraemate]

This guy has reason to be miffed. Didn't he buy, what, 4 of those iphones on the first day or something?

Full transcript of the interview

[Stony Stevenson]

A full transcript of the interview can be read here: Interview: Wozniak slams Apple for iPhone price drop snafu

Just did?

[biocute]

We just discussed the price drop last night.

Then instead of starting a new story, why didn't Woz contribute to that discussion?

That is what makes Slashdot great. I wish he did that.

The iPhone isn't the same as other Apple products

[bgspence]

No one outside of a small circle in Apple and ATT know what the real deal is. Apple is getting something for the phone and something each month for the service. ATT signed up using a spreadsheet with one set of assumptions. Some suggest Apple gets $200 per phone plus a bit of the monthly service charge. ATT's calculations could never guess Apple would change the equation this big so soon. It's not Apple's normal thing to slash prices. ATT will sell more services, but Apple probably gets a huge iPhone subsidy. I bet Apple took ATT to the cleaners with the deal.

Re:Why is Woz still relevant?

[chris_mahan]

Bad analogy. Sports require physical attributes that are well-known to deteriorate over time. Mental skills, unless degraded by disease or advanced age, do not.

The genius of Woz is that he used pen and paper to create something that had not been created by people who used actual hardware. He understood the fundamentals completely, but let his imagination run wild on a "what if".

How do you know he is still not doing that right now?

Must skill and artistry, in order to be recognized as valuable, serve the corporation?

Must Steve Wozniak, in order to be relevant in your world of Treasure, build another such financial behemoth as Apple?

Surely you must recognize that there are many people around the world who pursue their interests with dedication, skill, and imagination with little care of the financial gains to be derived.

Allow me to speculate. If Steve were independently wealthy, and no longer constrained to generate income to feed and shelter his family, would it not be a better use of his time to use his talents and breadth of experience to help his fellow man? Perhaps it is completely understandable that he should not relish the prospect of working at a soul-crushing cube farm. Perhaps it is acceptable for a man to stop trying to maximize shareholder investment when such a man has already done so amply, and rather dedicate himself to a different purpose.

Perhaps he has indeed changed what he does. But that does not make him less of a man.

Re:Is this who's on top syndrome?

[bentcd]

I'm curious about all the Apple bashing? Apparantly, Apple customers come across as smug bastards and, in a twist of irony, Linux users seem to really really dislike smug bastards. Or perhaps it's just smug bastards from a different camp they dislike, it's a bit unclear. Anyway, this tends to transfer over into any discussion involving Apple regardless of the underlying facts of the matter. The only thing that is holding Slashdot together at the seams is the unsurprising coincident that both smugh Mac-owners and smug Linux-users both harbour an overpowering dislike for Microsoft (which isn't smug, just evil). So long as this tenuous alliance is kept alive with the odd Microsoft-bashing article every now and then, our little community shall prevail! :-)

For the record: I own two Windows boxes, two Linux boxes and one OSX box. I use most of them on a regular basis, for various purposes.

Re:Woz vs. Gates

[rs79]

You know, back in the day (70s) gates published code in dr. dobbs documenting undocumented Z-80 instructions. Woz just made $2500 computers that those of us with s-100 systems found rather irrelevant. Gates built his own machine but had no interest in selling hardware, just software, which I kinda wish Apple had done.

Point is, back then Gates seemed like a fellow hacked and woz was just one of 100 guys that started a computer company and did all the hardware design.

I can't say I'm real impressed at having written machine code or done a (very non-statndard) disk controller. We all did that back then.

The first x86 on the net was an S-100 system running Gates Xenix in LA (gryphon.com). I don't think an Apple II ever talked to the network.

Obviously I'm not talking about now. Woz is cool, Bill is not. But that's not how it looked back then. The Apple II was regarded by people that already HAD a computer as a toy not worthy of much of anything and never understood what the fuss was all about. I think the reverance of Woz was strictly by people whose first computer was an Apple.

In a world without Apple there were still lots of choices and I have a greater revernce for say, Jay Miner than Woz. But if Apple hed nevr existed I'm not sure the landscape now would have changed much. Again, much as I hate to say it, MS drove the market and was responsible for the advent of cheap usable computers even your grandmother could use.

Let me be clear, I loathe gates and ms. But if you strip the emotion away gates has done more to get us where we are then woz ever did.

You may now mod me down to "-5, asshole". But you know I'm right. And don't worry it pains me as much to write this as it does you to read it.