Markoff reports, “Steven P. Jobs, the chief executive, said in an interview after the announcement that Apple would have been able to hit its publicly declared target of a million iPhones sold in the United States by the end of this month, even without a price cut. ‘We’re a high-volume manufacturer, and we’re pretty good at getting costs down,’ Mr. Jobs said. ‘It’s very clear we have a breakthrough product on our hands, but it’s also clear that many can afford it, some can’t. We’d like to make it affordable to even more folks going into this holiday season.'”
Markoff reports, “Mr. Jobs said that if the company had waited past the Christmas buying season to reduce prices it would have been forced to delay for another year reaching a broader consumer market. ‘We’re feeling like being more aggressive,’ he said.”
More in the full article here.
In an interview yesterday with CNBC’s Jim Goldman, Jobs said, “We want to get more aggressive for the holiday season. So, you know, we know a lot of people want an iPhone. For some, it’s out of their price range. We want it to be affordable for more people as we head into the holiday season. We’ll launch the iPhone in Europe next quarter…. [In] Asia, probably 2008. I think we’ll start to see it in some countries in Europe next quarter.
Full interview transcript here.
Jobs also spoke with USA Today’s Jefferson Graham and Edward C. Baig:
USA Today: What do you say to customers who just bought a new iPhone for $599? Sorry?
Jobs: 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.
USA Today: To do this, are you taking a hit on costs? Or have prices really come down?
Jobs: We’re in high-volume manufacturing, and we’re pretty good on the costs side. We’re also willing to be more aggressive. We think we have a real winner, and customers love the iPhone. The product’s been extremely well accepted; we want to put the pedal to the metal. A holiday season is approaching; we’d have to wait another year for another one.
More in the full interview here.
That is a bunch of Hooey! He is going to cut costs on phones like every other phone manufacturer does because it is the business model of the cellphone industry at the moment. There was a time that RAZR’s went for $500.00 (why should that price point sound familiar to iPhone owners?) look how much they cost now. When the business model of the cell phone industry changes so will the price structure. Come January, Mr. Jobs will introduce the new $500-600 model.
Just my $0.02
To the “quit yer bitchin” crowd: Your wish shall be granted.
Apple significantly re-set the degree to which customers trust the company. There will be no whining next time, but that will be because the early adopters will have gone away.
Apple and Microsoft are no different. They are both out to make money. If you think Apple execs and Steve Jobs are saints, you are just a naive sucker. Of course they planned this pricing strategy from the beginning. They took advantage of the hype and their Apple fan base to make a quick buck and it worked. Jobs is not being altruistic making this price drop for the poor disadvantaged masses. He is doing it for one reason – to make money.
As the saying goes, “The shine is off the Apple”.
@ JAKE:
-SP
What a bunch of whining babies! I’m embarassed by you whiners. I own a 4Gig iPhone that I bought on the first day available. I could care less that new phones are out cheaper.
Perhaps, Steve should have done something akin to what he did with iPods? He should have released the new 16Gig iPhone for $500, and the new 3G version of the iPhone for $600. That way he keeps the same price points, while lowering the price of old models. Would that have stopped the whining?
Its standard business – get used to it!
SJ and Apple isnt doing anything that any other business is doing everyday in every country all over the world.
That fake Steve Jobs page is VERY funny.
KenC – You deserve to be embarrassed.
I bought an iPod photo for $600 and the price shortly dropped to $400. I was irritated, but I also realize that this is life.
BTW, at the iPod price drop, they also dropped the Firewire power brick, the firewire cable, the dock, the video cable and maybe some other goodies so that the reduction on the iPod itself wasn’t as severe.
Prices on these electronic goodies do come down, features and capabilites do go up. Live with it.
Early adopter or not, a product is worth exactly what someone will pay for it. It’s the same for gold, dizzy dean baseball cards and high tech. If you were happy w/your phone then by definition you paid a fair price and a cut shouldn’t impact you in any way.
By extension:
I suspect few readers of this forum don’t know that refurb products are available a few months after a new release. Anyone knowing this who bought on day 1 knew they were overpaying and obviously didn’t care. When I bought this MBP I knew I was leaving several hundred dollars on the table by not waiting for refurb but I bought and smiled.
@Jack – Apple’s *entire reason for being* is to make money. They do it by producing superior products but making money isn’t a side benefit, it’s the objective.
MS and Apple’s ultimate objectives are exactly the same, it is their methods for pursuing this objective that differ.
A positive spin on this news:
If you ever looked at cost of mass production, you would realize there is significant price drop with quantity. Apple probably set $599 price point for iPhone assuming certain annual production rate. This news could mean they over-shot their annual production rate by a large margin, so the cost of production became much much lower than they were expecting.
Go buy AAPL
Quit your kevetchin’ $200 / 69 days since iPhone intro = $2.89 a day. People who can afford the iPhone spend what, at least twice that everyday on coffee? Small price to pay for the joy, functionality, usability, and utility of the device.
If you don’t get ‘screwed’ one way, you get it another. Instead of the iPhone, I needed (Yes, actually need, the old one died) a new digital camera body. I purchased the 30D… Guess what, the 40D came out! I lost out on the camera, but will make it up with the iPhone, whether its the 8gig at $399, or a new 16 or 32 gig at $600
Move on people, nothing to see here. Except maybe the grief, anguish, and moans of dispair coming from the other mobile phone makers. Wow, thats kind of exciting. I’d pay real money to see that…. Like maybe $400-$600 for the iPhone!
Apple must think this market is worth the time and money to go after. They have never (web object don’t count) dropped prices like this. Shareholders must be VERY excited to see where the puck is going.
Realistically, the reason that some are complaining about the price drop is most likely because they couldn’t really afford one in the first place, and now they feel cheated.
These are the same people who carry a tremendous amount of credit debt, always living in the red, and never seeming to understand why.
If you couldn’t afford your iPhone at $600, then you should not have purchased it. Now that it is cheaper two months later, you feel shafted by Apple because the price went down. However, no one forced you at gun point to go wait in line for a whole day and plunk your money down on it the moment it came out. You can certainly wish you had waited… that’s to be expected, but you wanted the latest, greatest tech gadget, and you got it for a premium. Now that the price has dropped, you’re whining? Grow up.
What’s next…? You going to buy a plane ticket, and then be upset that the week after you traveled, you could’ve purchased a cheaper ticket?
I would quite happily buy one at $599 today if I could in the UK!
You’ve got your hands on one of these way ahead gadgets and using it and apparantly loving it to bits and now you’re acting like you have a smell under your nose as far as Apple is concerned – blimey, some people! Plonkers!
Zorrin –
“That really bothers me because it’s clear that they planned on price gouging the early adopters and their biggest fans from the outset.”
Dude, it’s only price gouging if you have no choice about making the purchase. Prices for gasoline and pharmaceuticals are an example. The iPhone, on the other hand, is a purely discretionary purchase. I paid $600 for mine, and it was worth $600. If it had turned out to be seriously flawed or otherwise disappointing, I might feel cheated. But, it’s been everything I hoped it would be. No regrets. I paid what it was worth, and I got what I paid for. Anyone who whines about being overcharged simply isn’t taking responsibility for their own cost-benefit calculation. Would Apple have been less “greedy” if it HADN’T dropped the price? It’s a for-profit company, for God’s sake, and it’s pricing strategy is determined by many factors other than greed. Also, show me a company that offers more than two weeks’ price protection. Seems to me that Apple played it cautious until it was sure it had a hit, and now it’s getting more competitive. We all benefit, even those of us who paid the intro price, since we will have a cheaper upgrade path all that much sooner.
I pinch my pennies as hard as anyone, but the whining is just silly and self-indulgent. Sheesh.
To any early adopters that are angry about this:
SHUT YOUR MOUTHS. YOU GUYS ARE MORONS. If it wasn’t worth the $600 when you bought it, then why did you buy it?!
Apparently, you felt it was WELL WORTH the $600 to run out drooling and grab your hands on a frickin’ iPhone to be the first on your block to have one.
So if it was worth $600 yesterday, then it should still be worth $600 today. Plus, you got use out of it in the meantime. Plus, Apple has a generous 14-day price protection policy.
This is what happens EVERY DAY in the electronics industry. If you don’t understand how the electronics industry works, then don’t buy anything at all.
You guys would rather have your personal egos stroked about the poor $200 that YOU WILLINGLY SPENT for this device than have Apple kick ass this holiday season because they were fortunately able to lower prices & open up the iPhone to a whole new demographic.
Thorin,
I agree with you wholeheartedly. Oh, and don’t forget, you’re also too sexy for your shirt!
I love Apple products and own a Mac (G5 dual tower), 23″ Cinema Display, iPod Video (80 gb, bought four months ago, so I’m getting theoretically screwed by price cuts too — if I was a WATB), an iBook, and both my kids have older Mac desktops.
I am NOT an early adopter, however, and knew that within six months of release there would be a better and cheaper iPhone released. Everyone who frequents this site should have known that, but you chose to get your pretty new toy. So the price cut is a bit more than you expected. Deal with it! I don’t love my iPod any less — it was worth what I paid for it and it will last me for years.
As for an iPhone, there are a lot more consumers in my position — those that took a wait and see attitude — than there are early adopters of the iPhone, and this price cut is going to make the wait-and-seers VERY, VERY happy. Including 5 or 6 million of them who wouldn’t even have considered an iPhone purchase before the price cut — who declared, as i did, that there is no way I’m paying $500 for a freakin’ phone, no matter how sweet it is.
I think all this whining about Apple’s cutting prices for a breakthrough device in order to garner widespread adoption (and to make more money) is incredibly babyish. Enough!
Mobile phones are notorious for dropping in price shortly after being introduced. The only real shock here is that it was Apple’s iPhone, because Apple traditionally does not drop prices so severely.
Apple is actually making a smart move right now. The iPhone is 1/3 less in plenty of time for the Christmas season, and it has been reduced in price BEFORE any other phone maker has a chance to try to catch up with iPhone.
In other words, Apple is cutting off Nokia, LG, etc. at the pass by having by far the best smart phone at a price point that the competitors can’t meet.
Someone asked what was the trigger to lower the price. Perhaps it was knowledge of new smart phones designed to compete with the iPhone that may be introduced before Christmas. Think of this price move as a pre-emptive strike.
Bitching and moaning is part of the entitlement mentality of many Americans and other people around the world, like people owe you something.
I bough several at the full 600 price and I’m not crying. I look at it as an investment in Apple and we’ve enjoyed our phones.
And now they will cost less to replace if we lose them! It’s not such a bad thing.
I bought my iphone for $600 the day after it was released. I am thrilled about the price cut because it just means a wider market which will result in more software development. Now maybe I will be able to get epocrates on my iphone.
Does the ipod touch have a camera? I was an early adopter, am stll happy. Now i can consider getting more for my family. I think apple did what needed to be done. Nice features across the whole ipod line. The pricing is now where it should be. It would be nice if apple offers the early adopters a credit to itunes store for maybe 50$. Just a thought. It sure would quiet the whinning some.
To: Andy C. And I bet you haven’t overpaid on a brand new cell phone again, right? (unless you’re thick or rich.)
I’d be surprised if the same early adopters rush out and buy the next iGadget from Apple.
I paid the $200 early adopter money/privilege tax/$#!@ you money etc, but a fat lot of good reducing the price has done – I’m down thousands with the share price dropping $10 as it’s done in the past two days!
Here’s a solution:
Apple should offer all current iPhone owners a $200 credit toward the purchase of an Apple computer.