Friday, September 07, 2007

Angry Apple iPhone Customers Demand Discount

A little over two months ago, Apple Computer started selling a new product called the "iPhone". The initial promotion and the customer demand for this new product was an out of this world success. I remember seeing customers lined up for days at Apple and AT&T stores waiting to be one of the first people to purchase the new iPhone. Fast forward a couple of months and now Steve Jobs, the CEO of Apple, has decided to lower the selling price of the iPhone by $200. When this announcement was made a few days ago, thousands of people who waited in line for hours to buy a new iPhone just two months ago were outraged by Steve Jobs' decision to lower the price of this revolutionary device so quickly and by such a large amount. Now Apple is offering a $100 store credit for people that bought the iPhone, recently.

I am not one of those people that stood in line to purchase an iPhone, but if I was - I would be angry too. While listening to Rush Limbaugh on the radio yesterday he didn't think customers had any right to be angry about the quick price reduction of Apple's iPhone because all new products are expensive at first and then the price goes down over time. Rush Limbaugh is right about new electronic products having higher prices at first and then the price of those products goes down as initial research and development costs are recovered. The difference between what Apple did with the iPhone and say other products like LCD televisions and VCR's is the short amount of time it took for the initial price to be reduced and by what amount that first price reduction was.

Two months is not enough time for customers to feel special about paying full price for there new iPhone before everyone else has a chance to purchase the product at a discount. Yes, ego is part of what is driving the anger of customers of Apple's iPhone and I don't think anything is wrong with that emotion in this circumstance. Manufactures like Apple count on some people to step up first and over pay for a new product so the company can sell that same product to the masses at a lower price someday down the road. We now know that two (2) months is not a long enough period of time for the first customers of Apple's iPhone, who payed full price, to feel special before the product is offered at a discount to millions of other potential customers.

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