“The Cupertino, Calif., company said it would cut the price of the 8-gigabyte iPhone to $399 from $599 – an acknowledgment that the company overreached when it launched the phone just over two months ago. Investors sent the company’s shares down 5% on the news,” Cheng and Charny report. “‘Consumers had been priced out of the iPhone,’ said Trip Chowdhry, an analyst at Global Equities Research. ‘At the old price levels, they couldn’t hit their targets.'”
MacDailyNews Take: Apple is on track to hit their publicly-stated target of 1 million units sold by September’s end. The question is whether Apple is being very aggressive to get even more sales or were they not meeting unstated, internal goals? One thing’s for sure: Apple going to sell a ton of iPhones.
“‘We’re going to get even more aggressive,’ Jobs said during a company event on Wednesday in San Francisco. ‘We’re going to get even more aggressive. The customer satisfaction is off the charts,'” Cheng and Charny report.
“Questions about its high price have dogged the iPhone since its launch. While sales have been strong – the company said it is on track to sell 1 million units by the end of the month – the potential market was limited,” Cheng and Charny report. “‘You have to speculate that even though Steve said it would sell 1 million units at the end of the month, it’s not as fast as he would like,’ said Van Baker, an analyst at research firm Gartner Inc. ‘I’m not surprised by the price cut, but I’m surprised by the magnitude.'”
“Wall Street was concerned that Apple was going too far in sacrificing margins for the sake of sales. Shares closed down 5.1% at $ 136.76, not far above the day’s lows,” Cheng and Charny report. “Baker said it will be interesting to see how the other handset makers react to the price change. The move might not win Apple any fans among existing iPhone users.”
More in the full article here.