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Friday, September 07, 2007

Apple's iPhone Blunder Makes Buyers iRate

The unofficial motto for Apple should be "Great products at a not so great price." Apple bit the hands that feed the company's profits by revealing that the company knows no bounds in extracting the maximum out of cash from its core audience. Offering a $100 credit to overpay for more Apple products only further iRritated customers. The WaPo's Eugene Robinson nailed itin summarizing Apple's botched iPhone marketing strategy.

This time, though, he has failed to live up to one clause in his implied contract with iPhone buyers. The sky-high price was supposed to guarantee a decent period of exclusivity. For a time, if you bought an iPhone, you were supposed to be the envy of your friends. The ability to show off all the neat things it could do was your compensation for the fact that the iPhone didn't really change your life.

Apple customers are happy to iPay and wait in line (like Harry Potter fans) to be able to brag to friends that they were one of the first to buy (like my friend Michael), but the $200 reduction in price less than two months after it went on sale just makes them look silly. Apple should have had a better plan to phase in subsequent models of the iPhone, but at least it is now painfully obvious that the company likes to take advantage of customers by charging a ridiculous premium. Maybe the iSheep won't follow herder Steve around so closely anymore.

By John Gartner at 09:57 AM | Comments (4)

(4) Thoughts on Apple's iPhone Blunder Makes Buyers iRate

What company doesn't want to squeeze as much money out of the consumers as possible? They're all here just to help us out and they only charge us because they have to, right?

While I agree that they should have just released a new model or phased the price change slowly, I don't think it was overpriced originally; it was just expensive. If you take a quick scan of the phones though, there are plenty that are within the original price range. Even though they were within acceptable limits, Apple has never sold on price, the sell on value (or perceived value).

They probably should have just offered rebates like all the other phones do. I'm really surprised by the approach they took, but there is something admirable about it. There aren't many companies that hand money (even in store credit)form back to the customer.

For the whiners, geez, you had your phone for 2 months before your poor friends could buy it at $399 and even though they can now, you can go in and get $100 worth of accessories while they are scraping their pennies together. Its a piece of technology people, get over it.

Comments by Brandon : Friday, September 07, 2007 at 03:15 PM

This is what actually termed as trickle down effect, and I think Apple is enough efficient to outline marketing strategies as per requirements.

Comments by BlogOxide : Friday, September 07, 2007 at 09:51 PM

I admit being an Apple freak. I love the new iPod Touch and I day dream about the new iPhone. Steve Jobs is a big inspiration when it comes to marketing & pr. I thought it was super smart of him to write an open letter to the early adopters. I also would be upset if the price dropped by $200 after only 2 months but on the other hand that’s the price you pay to be hip & hot. But I guess he would have gotten even better results by calling Seth for some advise. This is was Godin has to say about it. He almost makes Steve look like a fool with no vision. Wooow. Who can do that ?

http://actionsport.tv/wordpress/seths-blog-how-to-spend-20-million/

Comments by Yves : Saturday, September 08, 2007 at 03:08 PM

I just don't see this logic. I think the iPhone was priced high when it was the only mult-touch game in town, and now they've brought the price down with the introduction of the iPod Touch.

Apple wants to sell iPods to people who want iPods, and iPhones to people who want iPhones. What they don't want is people who want an iPhone to make do with the combination of an iPod Touch and freebie phone rather than cough up an additional $300.

They needed to refresh the iPod line overall and get a real video iPod on the market. And with the wireless capabilities of the iPod Touch, it would have gutted iPhone sales if the iPhone had stayed at $599. Instead, they've got a nice, cohesive product set that gives consumers a lot of choice without price being a huge factor. I can get a video iPod/wireless device, or throw in a phone for a hundred bucks.

I certainly didn't feel ripped off that my iPhone cost $600. The moment I saw the iPod Touch I knew they were going to have to do something. This is the product people have been screaming for -- how did people imagine it would be priced? Where it is now, and with the iPhone all alone in the stratosphere? Or closer to the iPhone and totally out of whack with the rest of the iPod line? This is the only thing that could have happened.

I mean, I'll take my ecoupon and all -- I'm eyeing an iLife '08 family pack, although I don't know what I'll do with the dollar I have left over.

Comments by Tom : Saturday, September 08, 2007 at 04:44 PM

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