Early Apple iPhone Adopters Feeling Undercut by At Least One Third
FOR MORE: Jobs Apologizes, Apple to Give iPhone Customers $100 Credit
Yesterday's announcement of a $200 price drop for Apple's 8 GB iPhone, and the cancellation and clearance of the 4 GB edition, was all some investors took away from CEO Steve Jobs' gala rollout. Meanwhile, among the Apple faithful, there emerged clear signs of discord, especially after expressions of disapproval on Apple's forums evidently disappeared.
During his unprecedented "live coverage" of yesterday's Apple announcements direct from his living room, the lead anchor of online video service Cunning.tv -- who appeared to be no more than 11 -- put down the corn dog his mother had just handed him off-camera to check the stock value for Apple, Inc. It was about 12:45 pm Eastern Time, and it was starting to head south.
"What are you people thinking?" he shouted, tucking away half a bite into the corner of his mouth. "They just announced the iPod Touch! It has Wi-Fi!"
But at that same time, investors across the country were using their BlackBerrys to place sell orders on AAPL stock. They didn't hear the Wi-Fi or touch screen news, or if they did, they didn't get it. CEO Steve Jobs had just announced a $200 cut -- about one third the MSRP -- in the retail price of the 8 GB iPhone, and a $100 cut for the 4 GB which is being discontinued.
After finding its footing by about 2 pm at about $145 per share, Apple stock on the NASDAQ exchange resumed a downhill plunge. This morning, it had yet to find bottom, at about $136 per share and continuing down.
The iPhone price cut was so newsworthy this morning that it was among the first things to come out of NBC Today show anchor Matt Lauer's mouth. More than Pavarotti's death, Fred Thompson's late night gig, and Sen. Craig's lack of resignation, the fact that a few weeks ago he spent $200 more than he would have today was just itching to be said, and Lauer couldn't suppress the urge.
While a price cut for a CE device after its first three months on the market is not uncommon, a 33% slash for a product this important is certainly out of the ordinary, and any kind of double-digit percentage cut for a product bearing the Apple logo is unprecedented. Investors are believed to have taken the news as an indication that perhaps the iPhone isn't selling as well as it should, despite analysts' news from iSuppli and elsewhere that the iPhone outsold all other smart phones in the US for the month of July.
When asked yesterday what message existing iPhone customers should take away from so steep a price cut, Jobs told USA Today, "That's technology. If they bought it this morning, they should go back to where they bought it and talk to them. If they bought it a month ago, well, that's what happens in technology."
The response from the Apple faithful on the company's iPhone support forums was believed to be an uproar. But evidence of that uproar is waning, in the wake of what was evidently a purge of negative comments from Apple's forums. One generally upbeat Mac blogger posted screen shots yesterday of forum threads with names like "I feel cheated," and, "WHERE IS ALL THAT LUV??"
This morning, a check of those forums themselves reveals not only are those topics from the screenshot indeed missing, but at least one of their creators' usernames has been purged from the forum's rolls.
Of course, it may be impossible to remove every negative post, including those from people who have already found their initial reactions missing.
"Apple, what the h*ll are you doing?" reads one message posted very early this morning. "Just because someone writes something that may hurt for a moment in the long run others will comment that Apple had guts to allow all sides to be heard. Maybe the fact that Apple is trying to control these posts has been why others have always referred to Apple users as a cult like following. And you, Apple, are proving their point. Sad."
This morning, The Unofficial Apple Weblog posted an article for those who feel they paid too much and want to take action. Entitled, "Apple screwed you: So now what?," writer Erica Sadun reminded customers of Apple's official policy: If the company drops its prices within ten days following a customer's purchase, that customer can indeed request a credit for the price difference.
Between the 10- and 30-day mark, there may still be avenues for redress as well. "If you're within the first 14 days of purchase, you're golden," Sadun writes. "Go back to the store and raise hell. You may still be charged a $40 restocking fee - theoretically you shouldn't be for exchanges - but otherwise, you're good to return."
BetaNews' Nate Mook purchased his iPhone on day 1, though he doesn't count himself among the disappointed. He feels the price cut is indicative of two things: first that the price was already too high for sales to meet the company's expectations, second that it was making enough of a margin that a one-third price cut wouldn't hurt Apple - a theory confirmed by a recent iSuppli teardown analysis.
Not all comments on Apple's support forums were negative (especially those that are still up there). Adopting a tone that makes you wish Dana Carvey was available to read it aloud, one iPhone owner wrote, "So you decide to shell out the $600+ for the iPhone wanting to have the newest thing from Apple in your hand. Then, a couple of months later Apple decides to make the product more affordable and expand their presence in the cell phone market. Why would they decide to do such a thing? Hmm, I don't know, maybe because they are in business to make money by increasing their market share!...All I'm saying is that if you purchased your product recently and feel like you genuinely deserve a partial refund then fine, but don't blame Apple for making their product more affordable for other people."